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YFP 345: 7 Personal Finance Books to Read in 2024 with Tim Ulbrich

Posted on by YFP Media

Tim Ulbrich reviews seven impactful finance books he recommends for both seasoned investors and beginners to gain strategies and inspiration for success.

Episode Summary

In this episode, Tim Ulbrich continues the discussion from Episode 341 on “5 Financial Moves to Make in 2024.” The fifth “move” was about “setting a plan for your personal finance learning,” and this week, Tim dives into seven personal finance books that have profoundly influenced his financial journey.

With no particular order in mind, Tim shares insights from each book and how he has implemented key takeaways into his own financial plan. You can find links to all these recommended books in the show notes. Tim emphasizes that these are not just any books – they are ones he frequently recommends or gifts to others, and they have played a crucial role in his and his wife, Jess’,  journey towards achieving financial freedom.

Whether you’re a seasoned investor or just starting on your financial journey, these books are a must-read (or re-read) in 2024. Tune in for valuable insights and inspiration to help you pave your way to financial success!

About Today’s Guest

Tim Ulbrich is the Co-Founder and CEO of Your Financial Pharmacist. Founded in 2015, YFP is a fee-only financial planning firm and connects with the YFP community of 15,000+ pharmacy professionals via the Your Financial Pharmacist Podcast podcast, blog, website resources and speaking engagements. To date, YFP has partnered with 75+ organizations to provide personal finance education.

Tim received his Doctor of Pharmacy degree from Ohio Northern University and completed postgraduate residency training at The Ohio State University. He spent 9 years on faculty at Northeast Ohio Medical University prior to joining Ohio StateUniversity College of Pharmacy in 2019 as Clinical Professor and Director of the Master’s in Health-System Pharmacy Administration Program.

Tim is the host of the Your Financial Pharmacist Podcast which has more than 1 million downloads. Tim is also the co-author of Seven Figure Pharmacist: How to Maximize Your Income, Eliminate Debt and Create Wealth. Tim has presented to over 200 pharmacy associations, colleges, and groups on various personal finance topics including debt management, investing, retirement planning, and financial well-being.

Key Points from the Episode

  • Personal finance books and their impact on achieving financial goals. [0:00]
  • Balancing saving and spending for a rich life. [5:30]
  • Wealth-building books and their impact on financial planning. [9:30]
  • Building wealth through calculated risks and long-term investments. [14:09]
  • Personal finance books and their impact on the Tim’sjourney. [18:03]

Episode Highlights

“When it comes to personal finance, I believe strongly that there is no “arrived” with the financial plan. A commitment to ongoing learning and having the humility to understand that there is much to learn on this topic and mistakes are inevitable is key to long term success.” – Tim Ulbrich [01:49]

“Money is a tool that if we are planning appropriately, we can facilitate and direct to those areas that have the most significance.” – Tim Ulbrich [04:04]

“That’s why as we say, often, a good financial plan should take care of your future self, but also allow you to live a rich life today.” – Tim Ulbrich  [07:13]

“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%, linen, 75% cotton. But this is a piece of paper that has value because, number one, we all agree that it has value. And number two, it’s backed by the faith and credit of the US 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 accruing while losing sight of the so-what.” – Tim Ulbrich  [20:00]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week, I’m covering seven personal finance books that have been integral in my own journey that I think you should read or perhaps reread in 2024. My criteria for a book to make this list includes one that I frequently recommend or gift to others, and that I have implemented one or more things from the book of my own financial plan that has had a significant impact for Jess and I achieving our financial goals. Before we jump into the show and my list of seven personal finance books to read in 2024, I recognize that many listeners may not be aware of what our team at YFP Planning does and working one on one with pharmacists all across the country. YFP Planning offers fee-only high-touch financial planning and wealth management services for pharmacists at all stages of their careers. If you’re interested in learning more about how working one on one with a certified financial planner can help you achieve your financial goals. You can book a free discovery call at YFPplanning.com. Whether or not YFP Planning financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

Tim Ulbrich  01:17

Hey, everyone, welcome to this week’s episode! Tim Ulbrich here and I’m excited to talk through seven personal finance books that I think you should read or perhaps reread in 2024. For now, we kicked off the new year with Episode 341, where I cover the five financial moves to make to crush your 2024 goals. And we’ll link to that episode in the show notes. One of those moves was to set your learning plan. To have an intentional plan and effort to up your financial IQ and your financial knowledge. And when it comes to personal finance, I believe strongly that there is no “arrived” with the financial plan. A commitment to ongoing learning and having the humility to understand that there is much to learn on this topic and mistakes are inevitable is key to long term success. Now one of the greatest advantages that we have living in the 21st century is that we have access to learn just about anything that we want, often at low or no cost. Right. Thank you very much to the Public Library system. 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, which is I Will Teach You To Be Rich by Ramit Sethi. Now I had the chance to hear Ramit meet speak in 2019 at the FinCon event the Fin Con 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 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 derive the most significance. Now it sounds obvious, but it’s easy to fall into the 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 that 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 uses the terminology money dials, we talked about living a rich life, we’re talking about the same thing, right? Money is a tool that if we are planning appropriately, we can facilitate and direct to those areas that have the most significance. Now in fact, as a society, I would argue that we do this all the time, the literature shows us that experiences and giving derive the most significance in terms of the connection between happiness and money-  hold that thought I’m gonna come back to that in one of the other books that I mentioned in this list of seven. Yet those two things often fall towards the bottom of the list as we give preference to less meaningful things. 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 on 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 downs in this book, his teachings on automation have stayed with me and are ones I’ve applied in 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 you’ll ever build. And I would whole heartedly agree with that. It takes time, a little bit of time to set up a 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 101 read, it’s an easy read. Again, he’s a fantastic teacher. And I love the principles in this book and are principles that I often apply in my own financial plan. So first book on our list,  I Will Teach You To Be Rich by Ramit Sethi. 

The second book on my list is Die with Zero by Bill Perkins. Die with Zero by Bill Perkins. Now, this book is all about perspective, and was one of my favorite reads, if not my favorite read of 2023. 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 YFP finding the balance between living a rich life today, and planning and taking care of our future selves. Now, if you’re an aggressive saver, guilty as charged, right, and you find yourself challenged to enjoy spending money today, right to let go 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 are 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.” Nothing in the future is guaranteed. Yet we should plan for our future selves. Both are true, right, we have to strike this balance. And that’s why as we say, often, a good financial plan should take care of your future self, but also allow you to live a rich life today. And if you’re feeling that tension, I think you’re gonna find a lot of value in this book. 

Through Bill’s teaching, I’ve come to appreciate and still need a lot of help guidance and reminders from my financial planner, from Jess in 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 nearing retirement age that had over $6 million in net worth. It was quite sad to hear the husband rationalize 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 a 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 Ramit 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. Right, 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. So my challenge for you is I highlight this book Die With Zero here by Bill Perkins not only to read the book, but my challenge to you is does your financial plan include a balance of saving for your future self and living a rich life today? 

Number three in 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 a philosophy that guides those decisions, it’s the thread behind the decisions that we make. Now, some key takeaways from this book that have stayed with me for several years, I think I first read it about seven or eight years ago, maybe even longer. I’ve read it a second, maybe a third time at this point. And it’s one of those books I’d like to come back to every so often. 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 the 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 W2 income limits wealth building. Traditional W2 income has limits as it relates to wealth building. And finally, why business ownership and real estate investing are key legs of wealth building. So he makes a strong argument that much of the tax code is really written in favor of those that own a small business and those that own real estate. Now, that’s not to suggest that those pathways are for everyone, by any means. But it really highlights to me the philosophy in which we might be thinking about building wealth. 

Now, this book in particular, along with Tax Free Wealth, by Tom Wheelwright, and we’ll link to all 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 fair share, but we want to pay no more. And I think through these teachings, and really digging into the form 1040 and understanding how the different components of that form work and what are the levers that we can pull to make our 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. 

Our 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 Fallaw 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 in 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 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. 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 philanthropic or givers. But they often have a frugal mindset. 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 risks, 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 The Millionaire Next Door or the updated version, if you haven’t already read it. 

Alright, number five on my list is the Compound Effect by Darren Hardy. The Compound Effect by Darren Hardy. It was one of those books, it’s a quick read. It was one of those books, I remember exactly where I was when I read it. At our old house up in Northeast Ohio during the summer, I read it outside in 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 from those who have actually done it. Right. And as people came to mind that I thought, okay, who has been long term financially successful in building wealth? Not short term success, long term, financially successful? And as I thought more about that as like, I can’t think of anyone I know who got rich off of buying whole life insurance policies, buying and altcoins are buying NFT’s. 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 bandaids 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 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. They’re often boring stories in the literature really supports that in the book, The Millionaire Next Door, which I just mentioned previously. 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 are always in balance. But I’ve noticed that as a theme, and those that have been really long term, successful in building wealth, and often being philanthropic, as 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 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. That is the definition of compound interest when we think about saving over a long period of time. So this is the 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.

Our 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 the journey that we would take to get there. That book, The Total Money Makeover, listening to the podcast really lit a fire under me to want to learn more, right, as I mentioned, was kind of a wake up call to create our own path, our own plan. Even if we didn’t follow the path and 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, perhaps, the first six books that I mentioned, but maybe not the case with this one. I ran across this several years ago. And I intentionally book ended my list of seven here with this one in particular because I think that it’s an important reminder that money is a tool, right? I mentioned that when I talked about Die With 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%, linen, 75% cotton. But this is a piece of paper that has value because, number one, we all agree that it has value. And number two, it’s backed by the faith and credit of the US 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 accruing while losing sight of the so-what. 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 do 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 money typically lies in two main areas. Number one, spending money on experiences and memories that will come from those. And number two, on giving. When you look at the connection between happy and money, this, it strongly points to giving and experiences as an important part of the financial plan. 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 shore up some of the basis of their financial plan. These are the areas that you typically see people light up when they talk about their financial plan. Alright, so there you have it, short and sweet, seven personal finance books that have had a profound impact on my journey and are books that I would recommend you read or reread in 2024. 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@your financialpharmacist.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 [email protected]. 

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. 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 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 YFPPlanning.com. Again, that’s YFPPlanning.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. 

[DISCLAIMER]

As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding material should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archive newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted and constitute judgments as of the dates published. Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit YourFinancialPharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacists Podcast. Have a great rest of your week.

 

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YFP 344: Beyond the ER: The Entrepreneurial Journey of Dr. Jimmy Pruitt

Posted on by YFP Media

Jimmy Pruitt, PharmD, Founder & CEO of Pharmacy & Acute Care University, shares insights on his entrepreneurial journey and the EMPower Rx Conference.

Episode Summary

In this week’s episode, join us as we sit down with Dr. Jimmy Pruitt, a Clinical Pharmacy Specialist in Emergency Medicine at Atrium Health. Dr. Pruitt wears multiple hats as the Founder & CEO of Pharmacy & Acute Care University and the brains behind the EMPowerRx Conference. Our conversation delves into his fascinating entrepreneurial journey, exploring the roots of why and how he embarked on this path.

Throughout the episode, we gain valuable perspectives on the intricacies of balancing professional commitments and entrepreneurial endeavors. Dr. Pruitt shares his experiences, lessons learned, and the strategies he employed to overcome obstacles on his journey. Dr. Pruitt also shares his vision for the EMRower Rx Conference – a  unique conference and continuing education experience for professionals in emergency medicine pharmacotherapy. 

Tune in to this insightful conversation with Dr. Jimmy Pruitt to glean wisdom from his unique blend of clinical expertise and entrepreneurial spirit. Whether you’re navigating the realms of healthcare, entrepreneurship, or both, this episode offers valuable insights and inspiration for the road ahead.

About Today’s Guests

Dr. Jimmy Pruitt is originally from Orlando, FL, and is a combination of nerd and gym junky having a background as a division 1 cornerback then turned Doctor of Pharmacy from Presbyterian College School of Pharmacy in 2017. He completed a PGY-1 Pharmacy Residency at Florida Hospital Orlando, and then went on to Grady Health System in Atlanta GA for his PGY2 Emergency Medicine Residency. Dr. Pruitt is currently an Emergency Medicine Clinical Pharmacy Specialist at the Medical University of South Carolina in Charleston, SC.

Dr. Pruitt was honored with the Excellence in Diversity from MUSC College of Pharmacy, Presbyterian College School of Pharmacy (PCSP) Alumni of the Year, and keynote speaker for the 2021 PCPS graduation. Dr. Pruitt’s professional interests include cardiac arrest, shock syndromes, trauma, and hosting the #1 Emergency Medicine Pharmacy Podcast “Pharm So Hard” and operation his new pharmacy academy called Pharmacy & Acute Care University.

Key Points from the Episode

  • Entrepreneurship and pharmacy with Dr. Jimmy. [0:00]
  • Entrepreneurship, pharmacy, and education with Jimmy Pruitt. [1:37]
  • Validating a gap in the market for pharmacist-created acute care content. [6:21]
  • Overcoming fear and taking the first step in starting a podcast. [12:01]
  • Balancing full-time work and business as a creator. [16:10]
  • Growing a team and delegating tasks. [22:53]
  • Business growth and vision for a pharmacy education company. [29:02]
  • Emergency medicine pharmacotherapy conference. [34:56]
  • Emergency medicine and pharmacotherapy conference. [39:25]

Episode Highlights

“The biggest thing that people say is like sometimes you have to just jump and you just have to do all these different things. And I’m like, I have a family, one. So that really kind of changes the dynamic. It’s not just me making this big shift, but I want to make sure that I was able to consistently get that number.” – Jimmy Pruitt [18:37]

“But I’ve noticed as I continue doing both of this, me being a business owner and being very focused as being the president, CEO, whatever the title you want to give yourself when you’re when you’re starting out, it actually made me a better employee.” – Jimmy Pruitt [19:09]

“So as I looked at the component of making sure I’m meeting that output, that I need to be able to consider stepping back, I also realized there was so much more value, because now I’m able to understand other people’s problems.” – Jimmy Pruitt [20:29]

“But learning more at the job and understanding the problems that they have, and other people like them have, has made me be able to understand the market, and how I can potentially use that in the future. But more importantly, my skills as a business owner, has allowed me to be able to solve problems that early in my career, and earlier, you know, in places I’ve been people don’t necessarily think about.” – Jimmy Pruitt [21:58]

“I think when looking at growing a team and really get into that first step of, I want to bring someone else into this, especially when you’re talking full time employment. The very first employee that I hired a couple of years back was just my virtual assistant. And one of the first aspects I realized was a very big challenge of mine was, how do I explain what’s in my head that I do every day?” -JImmy Pruitt [25:03]

“The big thing that I believe that I’m trying to accomplish over again, this next five to seven years is to make this to where we have one unified goal and mission we’re trying to do: provide high quality education related to pharmacotherapy.” – Jimmy Pruitt [31:20]

“I want to provide a home for those individuals and I want I want them to be able to have a home, whether they’re gonna be the consumer, or the producer.” – Jimmy Pruitt [32:42]

“And we want to figure out, how can we do it as for us and by us, instead of someone else creating it and thinking they know what we want. Why don’t we just create it from the ground up?” – Jimmy Pruitt [38:01]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week I welcome Dr. Jimmy Pruitt, a clinical pharmacy specialist in emergency medicine at Atrium Health, Founder and CEO of Pharmacy and Acute Care University and Founder and CEO of the Empower RX Conference. We discuss his entrepreneurial journey, including how and why he got started, why he has maintained full-time employment, challenges going from creator to solopreneur, to building a team and the vision for the business over the next five to 10 years. I’m excited to announce our partnership with the 2024 Empower RX conference, a leading event in emergency medicine pharmacotherapy. This year it’s happening in Charlotte, North Carolina on April 26-April 27. I’ll be there and hope to see you there as well. It’s ideal for pharmacists, physicians, PAs, nurses and others in the field. Empower RX offers more than 10 CPE credits, insights from top experts, interactive workshops and groundbreaking research. It’s not just a conference, it’s a community focused experience, fostering learning and networking in a welcoming environment. Take advantage of discounted registration available to the YFP community by using code YFP2024 for 15% off. Again, that’s code YFP2024 or 15%. You can join in person or virtually registered now at EmpowerRX-conference.com and elevate your emergency medicine skills. Again, that’s EmpowerRX-conference.com. 

Tim Ulbrich  01:35

Jimmy, welcome back to the show.

Jimmy Pruitt  01:37

Hey, thanks for having me on again. And it’s been great.

Tim Ulbrich  01:40

So our listeners might remember you back from Episode 284, where we discussed your experiences monetizing your clinical expertise, we’ll link to that episode in the show notes so that folks can dig a little bit deeper. We’ll have some crossover here as well to bring people up to speed. But we certainly did a deeper dive in that episode. And Jimmy, for those that didn’t catch that episode and aren’t already familiar with you and your work, give us a brief introduction to your background and pharmacy and the work that you’re doing now with Atrium Health, as well as being the Founder and CEO of Pharmacy and Acute Care University and the Founder and CEO of the Empower RX Conference.

Jimmy Pruitt 02:14

Thank you. And that’s a mouthful for a lot of you guys. But again, I’m Jim Pruitt. Again, I’m by training at clinical pharmacy specialist at Atrium Health here in Charlotte, a Level One Trauma center, academic, Medical Center, all those great things. And then, in my spare time or lack lack thereof, I like to start off as being a content creator with this pharmacy PEARLS and just having different things that I can give my providers, then that really led to something else led to a podcast called Pharm So Hard. And once that happened, it was really the genesis of something special, I believe. It led to an audience of 1000s of people who didn’t know how to interest in acute care pharmacotherapy, and then from there trying to figure out how to solve the problems that they had. So that led to the next thing, the next thing being after 100. And so episodes Pharm So Hard led to Pharmacy and Acute Care University. And all that really is it just an academy that helps people, pharmacists in particular, with continuing education, but more particularly going to be for board certification prep. So whether you’re studying for your BCPS, or our most popular product that be CMP, your emergency medicine pharmacotherapy, or certification. That is where I spend a lot of my time- question banks, practice exams. And is making a lot of the content that goes along with that. And it’s just been phenomenal to see that growth. And what that led to is people saying, oh, man, I wish I had a place to go to talk about these things versus just studying for it, which led to the Empower RX Conference. So I think, long story short, I am an educator that started to understand the business a little bit more and continuing to learn what business is, and really is focused on how can I not just bring myself along, but how can I bring other people with me to understand the business side of things and monetize their expertise and content? 

Tim Ulbrich  04:08

We’re gonna talk a lot about that on this episode, Jimmy, I want to pick your brain have you know, you started with with an idea identified a problem that needed to be solved starting to solve that problem, which opened up more doors built community in this niche, which is really exciting. And now as you enter this growth phase, you know, there’s exciting opportunities and challenges with, Hey, how does this grow beyond the hours that you have in the day? Right? And what what what challenges may that bring? I want to first ask you that I was I was stalking you on LinkedIn and noticed in your headline, you have four different words creator, connector, educator, and pharmacist. Do one of those resonate more with you than the others and why?

Jimmy Pruitt  04:49

I think that is that’s a very, that’s a great question for one, but I think it it depends, like a good lawyer would say it depends. It depends on what I’m doing. And I think as I look at the different platforms that I’m currently in, I tend to be on one side more than other depending on that particular project. So I like to say, the biggest thing is like, I can be a connector, because again, most of everything I’m doing is usually not just myself, I’m usually bringing different people on whether that’s going to be at work. And I’m working with a provider, and a nurse is having a concern about something, I’m connecting those two and that problem and trying to also provide a solution. The same thing for when I’m in my pacu, where my pack you have, well, a potential customer has a problem. They want to be board certified, and I’m trying to connect them with the best highest quality information that helps them get to their end goal. And my conference, prospective people want a place to come. So I’m literally physically now connecting them with other people throughout the world in emergency medicine, pharmacotherapy. So I think connectors the the one thing I can say, but realistically, I have to be all of those other things, to be able to be a good connector. I have to be a great pharmacist, I have to be entrepreneur to make these things happen consistently. And I have to be kind of a creator to be able to have that audience to begin with. So I think connectors the one word, but I think depending on what hat I’m wearing, is really just depends on that location. 

Tim Ulbrich  06:21

Well, we say it depends on this podcast often. So that is that is welcome. But I appreciate what you’re what you’re sharing there. I want I want to dig deeper in a few areas that I see come up often with aspiring entrepreneurs and side hustlers that I talk with. And you know, one of the first things is really what was the beginning? Like, right, so the genesis of starting the side hustle that’s turned into a business, obviously, you have many, many different activities that you’re doing within that business. You know, tell us a little bit more about the problem that you are trying to solve and how you identify there is a gap and a need in the market. And I know you shared that briefly already. But you know, a natural question might be well, like Jimmy, aren’t these pharmacists already part of other organizations or, you know, cohorts where they’re able to gather other societies and so forth. So what stood out to you as an opportunity in the market that wasn’t already being served that you said, Hey, not only am I a part of this community, but I feel like my peers, my colleagues could also, you know, come together and we can provide value?

Jimmy Pruitt  07:22

Absolutely. So I think one of the things we look at, and I think the very first problem I wanted to solve was providing high quality education in the acute care space. So if we look, one of the things that is very common is that from a oncology standpoint, from a transplant, those medications that are branded still they have a lot of great continuing education out there. Because again, there’s grants, there’s different incentives for companies to make that content. And a lot of those get heavily represented. But from an acute care standpoint, a lot of things from a pharmacotherapy perspective was not necessarily being created by pharmacists. And emergency medicine in the pharmacy space is my first you know, love within this, but I realized that emergency medicine has everything is critical care is ambulatory care is all these other spaces. So I realized that there wasn’t pharmacist created content that was detailed, that was detailed, but also a concise so that we can see it and be actionable. And that was the aftermath of creating the pharmacy Frothy Pearls series that I created when I was a PGY2 resident at Grady. Once that kind of became the first thing I was like, Okay, well, the problem trying to solve is providing high quality education, from a pharmacist perspective in the acute care space, that is highly assessable. That was kind of a next branch with the audience that I was able to generate from from farm so hard, I realized that, hey, I’m already providing education, but I didn’t necessarily consider it to be very different and very unique. But then the audience would tell me these things. And after you start to look, you kind of change your perspective on how you’re looking at your interactions with people want to online, you realize, hey, I have a model here, from a business perspective that I can sustain because most of it, you know, I would love to direct you away for free every day. But it’s not sustainable. Yeah. And that was kind of the first component of finding pharmacist-created acute care, physical therapy information that was concise, but also provide them continuing education as well.

Tim Ulbrich  09:25

My next question was around validation. And how do you validate that that gap truly exists? You know, one of the traps, especially early on in a business as a hey, I’ve got a great idea. I’m gonna kind of run hard and then you realize, oh, wait a minute, like the problem that I thought needed to be solved. Either I’m in misalignment or maybe it’s not as big of a problem as I thought, you know, others may think and so you partly answered that when you said, hey, you know, through the podcasts, obviously, seeing your listeners getting some feedback, you are getting real time information that I’m sure shaped your next steps. Was there anything you did prior to starting that podcast as a PGY2 to validate the problem that needed to be solved, or was that the first step in?

Jimmy Pruitt  10:05

I think it was the first step. I would love to say that I had this aesthetic plan and things of that nature. But realistically, the first two years I was in business, I didn’t know I was in business. Yeah, because I wasn’t charging anything. I think that part of the equation that I didn’t look at what’s the value I was providing, and whether or not that was something that could be sold as a resume. And I think within pharmacy in general, we get so used to just providing a lot of content. And we’re just doing it for just the validation of our colleagues and just to provide great education. But I think the first piece that helped me understand the business aspect of it was when we started creating some of these, you know, hour long presentations, people said, hey, you know, is this for continuing education? And I said, Well, I can get it for but I didn’t realize the process, go through that. And then I remember saying, Hey, how can I get this credential? Is this AACPE certified? It’s like, oh, it’s a price tag to that. Yeah. And then the first step, like, how do I get that taken care of versus me just paying out of pocket a significant amount of money for one hour? I think the first the very first time I did this, three years ago, the credit hours was like $600 for one hour CE. And I was like, Well, if I have 100, people come to this, and we break this down, I think, you know, a few bucks would wouldn’t be horrible for me to do it. So I think that was the first step. But I think I don’t, it made me just think differently. That was the very first trigger to realize, like, hey, if I’m gonna sustain this, I have to figure out a way to monetize it, to just cover the basics of what I’m doing. I think that was the very first step in realizing people were okay with that. Not as many as I thought, initially. There’s a certain amount of people that was okay with that. And I realized that if I can scale it to any degree, it may be something that I can build build upon.

Tim Ulbrich  12:01

And speaking of first steps, you know, I often will will talk with folks that have an idea. But taking that idea, and taking the first step to begin implementation. It’s scary, right? I mean, you know, even when you do the validation of the idea, it’s one thing if people say, I’m interested, I’m gonna pay for it. It’s another thing if they actually show up and pay for it. And as you and I both know, you can assume some much lower percentage than then people may report. And so my question here is, how were you able to be comfortable with taking that first step, and maybe as a PGY2 resident, you know, maybe the pressures off a little bit, and you weren’t yet thinking about as a business, but even that, I’ve talked with pharmacists that are like, Hey, I’ve got a great idea. But, you know, to run a podcast, I got to do A, B, and C, and I got to worry about the microphone and editing and hosting, and yada, yada, yada. And soon enough, there’s no action. Right? There’s no action. And my question for you is, how were you able to take that important first step, that important first action, from which even though you didn’t know you’re in business, from what you would eventually learn and get feedback that would become the foundation of the business?

Jimmy Pruitt  13:09

Yeah, I think that the first step for me, and I would love again, to say that it was it was just phenomenal intuition and I was great, but it really came from mentorship. To be honest, the first thing was that someone, one of my mentors, John Paca, wanted to hear a podcast episode done by me. And he, he, I remember him mentioned, he’s my RPD, he’s my mentor, he was like, I want you to be yourself. And I want you to be different than everyone else. And that was the first thing he wanted me to do. So I think the process went from me having an idea to someone really pushing me and said they want to hear it. So the result was always him hearing this versus me starting it. So I think that was the first goal initially was that, hey, how let me produce this first episode, so he can hear it? Yeah. And that was the end result of the very first task or create this first pearl. So I can present it to these individuals because it’s part of my residency objectives. So I had like this end goal that I started while I was still in residency, but I think the biggest thing was him wanting to hear an episode, because the Pearls was the first thing but it wasn’t necessarily a first step into business. Pharm So Hard was actually the first step into business because again, that’s what opened me up to understanding the problems and the things that were valuable to people that wasn’t just my RPD. I think the first step was being able to start that podcast and the first step of me actually doing that was him saying, hey, I want I want to hear this. So I think for me, my action item was to complete it versus to start it. I think, getting to that point to where letting other people hear that episode, now that took a much longer period of time. To say same episode, I recorded the same thing, but having other people hear that and I was just fortunate to have him, Sean Troy Johnson, a few people to saying hey, you know, you should go for this and you should now let other people hear it. And I think once that came about my partner, Oscar Santalo, who initially started together, we went back and forward it on PGY1 but never gained traction. In PGY2 we gained a little bit more traction, and I made the first episode. And then it’s like, hey, I’ll do the next one. So it became this kind of back and forth to where I made the first one, we listened to it, it was fine. And then the next step was for him to do it. And then I had a little bit more time to be able to get to the next step. But I think those were our first action items. And I thought that I didn’t think it would lead to what it did. But I think just getting started and having some type of MVP is really what it being just having an MVP to start with. Now everything I do, I tried to create an MVP. But I think the first episode, and that was what, Brian Gilbert on antiquated reversal, back 2019? And its 2018. And that kind of lit to what it is today. But I think just getting that first MVP and having someone to push me, because traditionally, I wouldn’t have went through all the steps because my first episode took 16 hours to edit.

Tim Ulbrich  16:08

I remember those well. And I’ll occasionally throw back on, you know, episode one, just remember the journey. And, you know, but it’s a great reminder, I’ve mentioned on this show several times the book Start by Jon Acuff and I think your journey and story is such an important one that, you know, the dots aren’t always in a straight line. And the key is, when we take that first step, you know, we might have a loose idea, often not of what might be steps two, three, four and five, but it’s really through that first step that, you know, things start to happen, where in this case, your meeting a learning objective, you know, you sat down, you did the recording, obviously, there was some nudging in that process, you know, eventually it’s okay, we’re gonna edit this, we’re gonna share this, you know, and then they start snowballing. And obviously, through there, you start to build community, get feedback, validate the idea and start to evolve this into a business. And I’m so glad you mentioned mentorship, because it’s a critical reminder, for all our listeners out there that are precepting students, residents, fellows that are educators that, you know, sometimes we see something in someone, and it’s not until we can really slow down and have some of those in depth meaningful conversations that we can really help, you know, be the gentle nudge to help them – that learner  – see something that may, they may not even see themselves. And that’s really what I heard, you know, in your journey, that your RPD saw something in you that perhaps, you know, naturally as a resident, you may not always see in the moment. And I love that right, because I think that’s, that’s true for many, many stories, many journeys, where we can reflect back on a mentor, I’m thinking of several, as you’re talking that were so influential, and just action steps that I took, that led to other things, but it wouldn’t have been without their mentorship and encouragement from the start. 

Jimmy Pruitt  17:52

Absolutely. 

Tim Ulbrich  17:54

So Jimmy, if I’m following your journey correctly, your five plus years in as a creator with the podcast, creating content, three years or so with the Acute Care University, we’ll talk about the conference here in a little bit as well. And you’re still working full time in clinical practice. Talk to us about your decision to stay full time in practice, as you’re trying to also grow a business and what value that’s provided and challenges, I would presume as well. 

Jimmy Pruitt  18:23

It’s been unique, I would say, one of the things that we looked at is making sure I’m at that number, and making sure I don’t make the mistakes that I’ve seen other people do. And more importantly, make the mistakes that I’ve read about. The biggest thing that people say is like sometimes you have to just jump and you just have to do all these different things. And I’m like, I have a family, one. So that really kind of changes the dynamic. It’s not just me making this big shift, but I want to make sure that I was able to consistently get that number. And early on I end up saying once I’m able to make you know, one and a half times my my salary consistently, and my business can continue to function smoothly, then it will be a conversation of what I do from a full time standpoint. But I’ve noticed as I continue doing both of this, me being a business owner and being very focused as being the president, CEO, whatever the title you want to give yourself when you’re when you’re starting out, it actually made me a better employee. That was very unusual because I started going to work and said, Okay, understand the objectives that I’m trying to do, and understand how, what it feels like to have someone work for you. Yeah, and be able to accomplish these goals. So when I have conversations with  the board and with the administrators at my hospital, I’m asking the question, Hey, what are the KPIs that we’re trying to understand? And they’re like, What are you you’re a clinical pharmacist? I said listen, I can solve many problems. I realize the problems that you’re going to care about. And more importantly, I realize the problems that the person that report to you is going to care about. I’m going to help save people lives. I work in emergency department. That’s my fulfillment. How can I make this a, you know, a symbiotic relationship to where I get the resources that I want, but I’m also getting the things that you want me to get. So from that perspective, being a better employee has made it more enjoyable, because now I’m able to go in and solve problems and be able to find different things and have conversations that before I started being, you know, heavily involved in my company, I didn’t understand all the problems. I didn’t understand those problems. So as I looked at the component of making sure I’m meeting that output, that I need to be able to consider stepping back, I also realized there was so much more value, because now I’m able to understand other people’s problems. And  it makes me say, Hey, I may want to do this for a little bit more, because I’m able to do consultant work now where I can get brought in as a consultant for and ED pharmacotherapy, find different problems, and then say, Hey, I’ve done these things now, at certain institutions, and it opens up more doors for me at this point in my career, and I just don’t think that I initially thought that. Because I think everyone who goes into business initially thinks, oh, I’m going to work for myself, it’s gonna be great. I can wake up when I want to. It takes quite a while. But I’ve enjoyed the process. And I think as I look at all these things, what having a business and working full time has allowed me to do is cut a lot of this the skin out of my life when it comes to tasks that I don’t necessarily need to do. And it’s made it easier for me to focus on family, focus on activities, I want to focus on health. So I think having both of those has kind of put me in a position to where I have to stay very focused and enjoy, pick the things that I want to enjoy, and to glean different insights from situations knowing that there will be a transition at some point, yeah. But learning more at the job and understanding the problems that they have, and other people like them have, has made me be able to understand the market, and how I can potentially use that in the future. But more importantly, my skills as a business owner, has allowed me to be able to solve problems that early in my career, and earlier, you know,  in places I’ve been people don’t necessarily think about. So yeah, I’ve enjoyed it. There’s challenges, of course of not being able to take significant breaks and being able to have days where you just do nothing. But I think realistically, the continuation of doing it and seeing some benefits allow me to be able to do both, and be able to enjoy both. Because now I walk into the ER I don’t have to be a CEO today. I could just focus on this component and is vice versa. So I’ve enjoyed it. It’s helped with burnout. But I’ve really enjoyed the process. 

Tim Ulbrich  22:52

A few things you said there that I love, Jimmy,  that are worth highlighting, you know that the patience that I hear there, the intentionality in your thought process. You talked about a certain multiple of income one and a half times and you know, that that’d be in a place where maybe the conversation starts to shift, obviously, you and your situation – everyone’s entrepreneur journey is different, right. And I think there’s sometimes there’s this blanket, kind of advice or blanket type of idealism around entrepreneurship, which is like, jump in, and you’ll figure it out. You know, and it’s like, you know, for some people, that is their story. It’s not my story, wasn’t your story. But for some people it is. And I think for everyone’s situation, you know, it’s different. And some of the things you said really resonated with me as I had some crossover from full time work and the entrepreneurial journey. And it was several years in before making that transition. But the connection between, you know, the entrepreneurial journey and becoming a better employee, I felt that. I felt like I brought more skills to the workplace. I felt like it prevented burnout, right, some of the change in pace and environment and work and, and I think there’s something to be said, too, when you’ve got, you know, the business that’s growing, and all of a sudden your employment becomes this place of opportunity and learning and growth like, wow. I would argue Jimmy’s probably that much better of an employee and an asset. Like you’re you’re not dependent necessarily in that moment on that income, you know, as you’re building something else, and you’re able to really bring the value to the workplace, you know, that you can bring. So I think a lot a lot of wisdom there that you shared, as well as just continuing to build build the skills. Jimmy, as you have grown from content creator to solopreneur, to now building out a team. And we’ll talk again about you know, the conference here in a little bit in the logistics and all that’s involved, my mind is spinning partly because I’ve been through this journey as well. And I know that with that growth, comes fruit and comes challenges as you look into building a team and delegating and letting go. Just talk to us about that journey. I think it’s something we don’t hear enough about, as we often hear maybe more solopreneur type of stories but as you have grown and you built the team, what has been and some of the fruit what have been the challenges of that?

Jimmy Pruitt  25:02

I think when looking at growing a team and really get into that first step of, I want to bring someone else into this, especially when you’re talking full time employment. The very first employee that I hired a couple of years back was just my virtual assistant. And one of the first aspects I realized was a very big challenge of mine was, how do I explain what’s in my head that I do every day? I didn’t realize how challenging that was going to be, until I started assigning tasks and realized that that wasn’t necessarily what the output that I wanted. And I realized that it wasn’t necessarily the employee’s fault. It was really how I was able to give information and how I was how detailed I was able to be about what’s the purpose, how to get there. And then SOPs and having templates and all those things that people talk about that are not, the cool thing to think about are so valuable. And what it allows, it allowed me to do is be able to communicate more efficiently. When I first got into pharmacy, what are the key things that was very, you know, self conscious about my ability to communicate, because again, I grew up inner city kid, again, not necessarily being around many college educated people. Again, I’m one of like, six high school graduates in my family. So the way I communicated, it was, again, very different than the way I communicate on a daily basis now. It was something that was a very limiting factor for me. And I realized that I had to figure out a way to communicate better. And I really, I love to talk, I love to kind of do these different things. But as many people can probably hear, I have a Southern sudden tone, I still, you know, speak in a particular way. And I realized that in order for me to work better with other people, especially on diverse set of people, I need to translate that, translate that and technology has been phenomenal. Being able to voice to text has been the best feature I’ve ever had. So that took the initial challenge of communicating exactly what I wanted to my first employee. And it kind when I went back and edit it and went back and forth, that changed everything. Then going from there to next step was figuring out how can I not spend all of my time not doing this, in the next step was reading different books, educating myself as a, Hey, have that employee have them make the template. You know the output that you want, you know, what’s quality work for you now have them do that. And I think once I’ve transitioned from being the only person that produce the output, to try and to explain that and figuring out better ways to explain what I want to allowing the person who I’ve been working with now for over two and a half years to make the template because they do it well. That was a very long process. But I think it was one of the more unique and impactful things that I’ve learned through this process. And it went from a major challenge to being something now that I consider to be a very, you know, streamlined process. And now bringing other people on has been a lot easier because I have something and a have that he can I can show them as an output, but I can also provide them now templates, SOPs and things of that nature. So I think that’s one aspect that many people don’t speak of, or think about, but the books are out there, people don’t speak on it, and think about enough when they’re starting a business. And I everything you do, guys, if you possibly can record yourself, speak through it, dictate it and do it once. So you can always be able to reference back to it. That’s the one thing I would like to tell people and then realizing that you have to take some level of consideration depth that everyone is not going to do it the same way you do it every single time. You have to create a process that allows for them to get close, I say 75% as good as you are on a consistent basis.

Tim Ulbrich  29:02

That’s really good stuff, Jimmy. I’ve had similar experiences and I think often people run up into, you know, barriers where they start to grow, they might hire a contractor to hire employees, they run into some of the frustrations you experienced. You know, I think we’re you push through it, often people may retract and kind of fall back into this solopreneur model, which again, everyone’s build something for different reasons, different goals. But as you continue on this vision, being able to accomplish the vision you have will depend on Hey, what time, what tasks need to get done beyond that that Jimmy can do within a day which requires a team and processes and all the things that you mentioned. You’re sharing reminded me of the book, procrastinate on purpose by Rory Vaden. He talks about, you know, exactly this concept of, you know, could you do the task in 10 minutes, that’s going to take you you know, five hours, you document you could. but there’s a certain return on time investment Right, if if you do a repetitive task five times a week, that takes you 30 minutes, sure, it’s gonna take you a lot longer to train someone to get to the quality that you want. But over enough repetitions, especially those recurring tasks, if you can fight through that, you’re gonna have a lot long term benefit of the return on time. And so I love the share that you had there, I think is a great example of that. I want to ask you to zoom out on your business for a moment. And I think it’s sometimes it’s hard as the CEO, as the person who’s operationalizing, at times in the weeds, you’re in the midst of planning for a conference, I’m sure there’s tons of logistics things that are moving, it’s hard to zoom back out to that 20,000 foot view to say, Where are we going? And why are we going in this direction? And so, Jimmy, as you zoom out and look at all the things you’re doing across the content, and the podcast, the PACU, the conference, the various educational products, the offerings that you have, what’s the five to 10 year vision? Where do you see the growth going, as you look at all these things you started and now you move into this this next phase of growth?

Jimmy Pruitt  31:10

That’s a great question. And I do this every once a while and I had to force myself usually, every every quarter, I tried to do it. Sometimes better than others. The big thing that I believe that I’m trying to accomplish over again, this next five to seven years is to make this to where we have one unified goal and mission we’re trying to do: provide high quality education related to pharmacotherapy. How do I go from many different products, many different services, many different things to one umbrella company that can be operationalized by other people consistently and provide that value that we started out with, and, and being okay, not knowing each individual step to get there. So I would love to say in in five years that I’m in a position where I’m sitting on a few boards, I am the one who makes the final checkoff. But I want other pharmacists that have this, this passion, to be able to impact people through education, to be able to monetize their expertise to have a home. And I don’t necessarily feel that there’s a huge home for that now, there’s opportunities to volunteer your time, there’s opportunities to be part of other organizations, things that nature, but I believe that there’s I should say, there’s not an abundance of homes for pharmacists, and those who engage in pharmacotherapy to share, monetize their expertise. I want to provide a home for those individuals and I want I want them to be able to have a home, whether they’re gonna be the consumer, or the producer. I think that those is the things that push me forward and figure out how can I add more people to my team to add that passion? How can I make sure that we do this, and I feel good about it, because at the end of all of this, the one main thing that’s going to happen is improved patient care. So for me, when I think my business perspective on that, I feel much better knowing that the very, very end end goal and very in any user of this, the recipient of all the things we’re doing is going to be someone getting the right drug at the right dose at the right time. And doing it in the right way. Yeah, so for me, I want to provide a platform that I’m leading, or that I’ve led, that’s going to be able to influence patients by those who expertly use pharmacotherapy.

Tim Ulbrich  33:42

What I love about that we haven’t talked too much about that on this episode is I’m a firm believer in having a strong anchor in your business of a why behind everything you’re doing, because through the ups and the downs, you’re going to have to rely on that anchor. And when you talk about everything pointing towards improved patient care, wow, that connects all the dots of everything we’ve been talking about, right? Because building a team, delegation, getting comfortable with that space, and, you know, may not always be done the same way that you do it in here community! Community of the consumer. Community of the Creator. Like, wow, the urgency of that is important, right? Because that’s all aligned towards being able to have more people in this community, creating in this community, as well as getting information and benefiting from the community, all pointing towards improved patient care. Like that, I just hope everyone hears that that is thinking about an idea or has a business that when you have that type of compelling torch of a vision and a flame. It provides so much clarity. I’m not saying it’s gonna be easy. It provides so much clarity of where are you going and why are you going there and that is so critical when you’re building something and not every business can say that. To have that type of clarity of vision and that type of clarity of messaging. I love that. Absolutely love that. Let’s talk about the Empower RX Conferene coming up April 26-27th in Charlotte, I’m really excited about our collaboration surrounding this event. I’m looking forward to have the opportunity to meet your community there live in Charlotte. And I suspect that we have several listeners that have different areas of clinical expertise that maybe are in acute care and are going to be attending the event. Maybe they’re brainstorming other educational opportunities in their own niche. So tell us more about the event. How did it get started? And how is it evolved to the current state?

Jimmy Pruitt  35:27

Absolutely. EmpowerRx has been just another brainchild of wanting to improve patient care. But realizing again, we sort of go back a couple years ago and realize the history of emergency medicine. Again, we had three PGY2s in emergency medicine back in 2004. I’m starting one this, we’re over 119, I believe, in 2020. So I think as we look at the number of the growth that’s there, we realized that not every aspect of emergency medicine pharmacotherapy has been able to catch up. One of the areas that I remember mentioning, as we made Pharm So Hard was that there wasn’t a place for us to come together, hang up talk about just emergency medicine, versus just having a 10 minute Pearls or just having a 60 minute session with a few presentations. That was you know, spread out dispersed amongst the major organizations, they’ve done a phenomenal job of providing resources, and helping us grow the specialty. But I wanted to provide a place that it was very unique to emergency medicine pharmacists. And if you know anything about us, if you’ve had, if any listeners are part of, you know that you have to be a certain type of personality to consistently work in emergency department. And I wanted to provide a space for that. So I remember sending a text message to Kyle Wendt, he was he was at MUSC at the time, and saying, hey, what if we just created our own conference? And what if we just made it to where it was? It was like, it wasn’t like any other from a professional standpoint, what if you just you didn’t wear dress clothes? What if you didn’t come there at a tie, you came there and a T shirt, some jeans, and you just was having a good time. And we just spent all day talking about things that really impact emergency medicine pharmacotherapy, whether it was clinical, or whether it was the social components. There’s a lot of things that happen in emergency medicine on a day to day basis that there’s it’s not in the textbook. You don’t know how to have the interaction with the one mean nurse. You don’t know how to, you know, make sure that you’re able to think quickly when that patient comes in, that’s unannounced. We want to provide a place where we can talk about those things. But also, can we be ourselves the same way we are at the bedside. Because many ER pharmacists will tell you, when we go to the actual pharmacy area, there’s a certain persona that we we uphold when we talking to our superiors. And there’s what happens in the ER when we spend the majority of our time with nurses, physicians, EMTs things that nature. So I wanted to provide that environment, that community. And we sent this out in 2020. And we want to figure out, how can we do it as for us and by us, instead of someone else creating it and thinking they know what we want. Why don’t we just create it from the ground up? And that really was the initial phase of this. And it led to us being able to create an environment where we speak on many aspects of acute care pharmacotherapy, particularly again, the resuscitation part of it. So whether you’re a central pharmacy that responds to cardiac arrest, we have information there for you whether you’re a nurse who just happened to be interested in the drug component, we have something for you. So I think we are a emergency medicine pharmacotherapy conference. And we’re not necessarily a EM pharmacist conference in a say. So I think it kind of brings together our world in one place over two days, and the initial one was going to be virtual, because again, COVID definitely has something to do with that. And then last year, partnering with SAEM. And we got to see a sense of it. But I think that the next phase was okay, we keep saying that we’re for us, and by us, we have that everywhere. This is the first year we’re going to do everything completely in person, have some virtual access and completely be for us and by us and we grew our team tremendously to build something that again, it’s for all of us. And when I say us, that can be a physician, that can be a nurse, that can be anyone in that space, but you now have a home to discuss pharmacotherapy. 

Tim Ulbrich  39:24

I’m really excited to experience it. I’ve been to many, many pharmacy conferences, but I’m sensing there’s something different, something unique about this, and I can’t wait to be a part of it. Hopefully the emergency medicine folk will allow me into the room. It’ll be a good, good, good chance to interact. And I’m really looking for it’s another great example to me, Jimmy, of something that, you know, you obviously had interest built up in a community and following at the point of when you launched that first one, but you still had to take that first step, right. And sometimes that means success. Sometimes that means failure and certainly you’re going to learn and grow from it. And I can hear the evolution that the conference has taken the last several years. So really looking forward to being a part of that. And I just as we wrap up, Jimmy want to say I admire and I mean this wholeheartedly admire, what you’ve built, why you’ve built it, how you built it. I love the niche focus. I love the clear messaging you have, there’s a strong sense of community. And there’s a strong anchor back to the vision of why that you’re doing and that that is the recipe for success in my mind as people are thinking about building a business. So, Jimmy, thank you so much for taking time to come on the show. I appreciate it.

Tim Ulbrich  40:29

As we wrap up today’s episode, let me remind our acute care healthcare listeners about our partnership with the 2024 Empower Rx conference, a leading event and emergency medicine pharmacotherapy. This year, it’s happening in Charlotte, North Carolina on April 26, and 27th. I’ll be there and hope to see you there as well. It’s ideal for pharmacists, physicians, PAs, nurses and others in the field. The Empower RX conference offers more than 10 CPE credits, insights from top experts interactive workshops, and groundbreaking research. It’s not just a conference, it’s a community focused experience fostering learning and networking in a welcoming environment. Take advantage of discounted registration available to the YFP community by using code YFP2024 for 15% off. Again, that’s code YFP2024 for 15% off you can join in person or virtually register now at EmpowerRx-conference.com and elevate your emergency medicine skills. Again, that’s EmpowerRx-conference.com.

Jimmy Pruitt  40:29

Thanks for having me on, Tim.

Tim Ulbrich  41:32

 As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward looking statements which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/ disclaimer. Thank you again for your support of the Your Financial Pharmacists Podcast. Have a great rest of your week.

 

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YFP 343: Getting Ready for Tax Season with Sean Richards, CPA

Posted on by YFP Media

Tim Ulbrich and Sean Richards, CPA, discuss the tax preparations listeners should be considering ahead of the 2023 filing.

Episode Summary

In this episode, Tim Ulbrich and Director of YFP Tax, Sean Richards, CPA, discuss the tax preparations listeners should be considering ahead of tax season and the 2023 filing. Whether you DIY your taxes or work with a professional, there are documents that need to be on hand to file your taxes. Sean shares essential tax moves for the year, emphasizing the significance of being proactive for the 2024 tax season. Sean also discusses the value of a year-round approach to taxes and the in-house services by episode sponsor, YFP Tax, showcasing the value of personalized, holistic tax planning.

About Today’s Guests

Sean Richards, CPA, received his undergraduate degree in Corporate Finance and Accounting, as well as his Master of Accountancy, from Bentley University in Waltham, MA. Sean has been a Certified Public Accountant (CPA) since 2015 and is currently pursuing his Enrolled Agent certification. Prior to joining the YFP team, Sean was the Senior Treasury Manager at PRA Group, a global debt buyer based in Norfolk, VA. He began his career at American Tower Corporation where, over 10 years, he held several positions in audit, treasury and accounting. As the Director of YFP Tax, Sean focuses on broadening the company’s existing tax planning and preparation operations, as well as developing and launching new accounting offerings, including bookkeeping, payroll, and fractional CFO services.

Key Points from the Episode

  • Tax preparation for 2023 with a CPA. [0:00]
  • Tax moves for 2023 and preparation for 2024. [1:11]
  • Tax planning and preparation strategies for individuals and businesses. [8:56]
  • Tax season preparation and changes. [13:59]
  • Tax planning and goal setting for next year. [16:56]
  • Comprehensive tax planning and year-round approach to taxes. [22:25]
  • Year-round tax planning and personalized service. [27:24]

Episode Highlights

“And the big thing I’ll say about extensions is that the one of the things I’ve been noticing over the past few years is that there’s just this stigma about extensions, and how you know, a lot of people have never done it before. And it seems like it’s only something you can do if your situation is complicated. And it’s only something you can do if you are working with a professional and they need to do all the work for you and everything. But really extensions just give you and give your preparer more time to get things figured out, make sure that you are taking advantage of all your deductions and credits and everything.” – Sean Richards, CPA

“As Tim Baker would say, when it comes to extensions, right over rushed right over rush, right.” – Tim Ulbrich

“Yeah, I would be, you know, thinking about your own kind of general financial goals and then try to think about as you’re going through this whole tax filing process, how does your tax situation align with those goals?” – Sean Richards, CPA

“With comprehensive tax planning, is just looking at your taxes kind of throughout the course of the year like I’ve been alluding to throughout this whole conversation. And one big thing there is will be kind of what you were just saying that filing taxes. It’s not always really the finish line and might also be the starting point for somebody else.” – Sean Richards, CPA

“But with holistic plan, you have your tax return that you start with whatever is etched in stone sent to the government. And then from there, you’re able to sort of do whatever with testing out different types of scenarios and projections and looking at, hey, let’s take a look at our paychecks year to date, let’s see where are withholdings are at, let’s see what we expect our side income to be and our rental income. And oh, we’re going to have a kid this year congrats and, oh, we’re buying a house, let’s see how all these things play into our tax situation in the middle of the year.” – Sean Richards, CPA

“So there’s just so many different opportunities to, you know, maximize your efficiencies with your taxes, you know, take advantage of all the things that are out there. And if you don’t have a year round kind of approach to it, and you’re not looking at it in a cyclical kind of way, you’ll miss those things, you’ll come to filing, and you’ll be kicking yourself saying, let’s do it better this year, let’s do it better this year.” – Sean Richards, CPA

“So the name of the game with those is energies. Definitely still the big biggest thing. Energy efficiency, green initiatives. So people typically immediately think of EVs. I mean, that’s that’s a great example. And that’s one where the credits are sort of just getting better every year, there’s, more available to you” -Sean Richards, CPA

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week YFP Director of Tax and CPA Sean Richards joins the show to discuss getting ready for the 2023 taxes. Yes, it’s that time of year tax season is officially upon us. And you probably started to receive various tax forms in the mail that are piling up if you haven’t already done so now is the perfect time to switch gears and start getting ready for the 2023 taxes. If you aren’t sure where to start, we’ve got you covered with a free checklist to help you along the way. In this free checklist we cover three final tax moves that you can make for the 2023 tax year, four ways to start prepping for tax season, and three key items that you can be doing now to plan ahead for this tax year and beyond. If you’re ready to take action and set the stage for a successful 2023 taxes, you can download this free checklist at yourfinancialpharmacist.com/taxchecklist. Again, that’s yourfinancialpharmacist.com/taxchecklist. 

Tim Ulbrich  01:09

Sean, welcome back to the show.

Sean Richards  01:10

Thanks. Thanks for having me. And thanks for allowing me the chance to get on here before I disappeared. And hopefully I can spread some knowledge to folks again before I kind of go into my hole for the for the spring and start getting into the fun stuff that I live for.

Tim Ulbrich  01:26

Tis the season, hard to believe here we are and end of January thinking ahead to tax season. And we’re really excited about the work that you and the tax team are doing. We’ll get into that as we get towards the end of the episode. But we want to use this time of the year really as an opportunity to make sure that our community, our listeners are focused as early as they can on getting prepared for the tax season, whether they’re hiring a pro, like YFP tax, whether this is a DIY type of solution. You know, this is the season where we start to see those forms showing up in the mail, we put them aside on the desk. And then we want to do everything that we can to get ready. So we’re going to talk about in this episode, Sean, some some final tax moves that folks can make here. Even though we’re in 2024. We’re doing the 2023 filings. So some final moves that they can make. We’ll talk about getting ready for the tax season, how they can be prepared to make sure that the filing goes as smooth as possible. And then we’re to start the conversation about –  as we’ve highlighted many times before on the show – we want to be as proactive as possible. So how can we be thinking ahead to the 2024 tax filing here in the beginning of the year, again with that proactive strategic approach. So before we jump into the meat of each of those sections of the podcast, Sean, just remind us of the deadlines. I think folks are probably familiar overall. But you know, we see more people in our community extending. So I think it’s worth talking about that as well. What are the deadlines that folks need to be thinking about this time of year as it relates to tax? 

Sean Richards  03:01

Yeah, I mean, the big deadline that people typically are familiar with his tax day, and that’s usually April 15, which is this year, sometimes it falls on holidays, or, in fact, sometimes I’m from Massachusetts, and it often falls on a Massachusetts specific holiday. So we get a little bit of an extra push there that other states didn’t get but not not afforded to that anymore. But that mid-April date is typically the the regular sort of Tax Day date for regular individual filers, assuming that there’s no extension that’s filed. And the big thing I’ll say about extensions is that the one of the things I’ve been noticing over the past few years is that there’s just this stigma about extensions, and how you know, a lot of people have never done it before. And it seems like it’s only something you can do if your situation is complicated. And it’s only something you can do if you are working with a professional and they need to do all the work for you and everything. But really extensions just give you and give your preparer more time to get things figured out, make sure that you are taking advantage of all your deductions and credits and everything. And that bumps your regular tax deadline from April all the way to October. It’s six months. And it’s a guaranteed thing, basically. I mean, almost every state falls the Fed. And if you do the extension with the Fed, it’s guaranteed as long as you make a payment against any, you know, expected bills you’re gonna have. It’s just it’s worth doing. We do it for all of our clients proactively. That’s something we’ve been rolling out over the past couple years is just getting ahead of that, get it filed. And that way you don’t have to worry about it. You know, you can take your time figuring out if you think you’re going to owe any money, make an estimated payment, and then spend however much time you need to just dot all the i’s and cross the T’s and get everything figured out. You know, it’s what we see a lot of folks doing nowadays, it’s the way the industry is heading. So those are the two big individual deadlines. And if you’re a business owner and you actually have to file a business return, basically shift that up a month. Yeah. On March 15, and September, if you extend out.

Tim Ulbrich  05:03

As Tim Baker would say, when it comes to extensions, right over rushed. Right over rush, right. So I think when we look at tax season, you know, there’s a lot of work crammed in a short period of time, and we want to make sure that we’re doing it right. And that we’re, you know, optimizing the tax situation the best that we can. So let’s jump into the first section, first part of our discussion, which is some final 2023 tax moves that our listeners could make may or may not make sense, obviously, depending on their individual plan. So Sean, even though we’re in 2024, calendar year, there are some actions that can still be taken for the 2023 tax season. What are those key ones that our listeners should be thinking about? 

Sean Richards  05:47

Yeah, and it’s one of those things that you always want to try to be doing things in the calendar year if you possibly can. But there are things that you aren’t going to be able to do by the end of the year. You know, some of these things with retirement contributions and stuff, you’re gonna want to know what your AGI is, or what you expect it to be. Or you might have to find out kind of what kind of cash flow you have available for yourself to make some of these different types of contributions and things. But right, so the IRS actually does allow some actions to be done after the tax season, when typically, if you’re a cash basis, taxpayer, it’s sort of whenever you get that cash, that’s the year that it happens. And so the big ones are retirement contributions, IRAs, specifically, those go out to your your regular deadline. So typically, it’s going to be April 15. For folks, the one I’ll mention there is that aside, for some exceptions, with some solo plans, 401K’s that’s typically a year end kind of thing. So if you didn’t max out on that, you probably don’t have much of an opportunity there. But again, you do have the opportunity to contribute to an IRA. So that’s something to look into. And I mentioned a solo 401K, but if you’re doing anything like that, or a sep IRA, those actually can be extended out if you have an extension. So another reason to file that extension, by yourself six more months to figure out where you’re gonna land, what kind of cash you have available to make a contribution towards something like that. And then the other big one is HSAs, very similar IRAs, it’s it goes to your your April deadline. So if you didn’t hit your max, or if your company contributed, but you still have some room to hit the max there, definitely tried to hit that that the HSA, I say it all the time, but it’s one of the few things that has the triple tax benefit of tax free contributions, tax free distributions, and tax free growth. So big one there. And then the other one is it. So it’s a little bit more, I don’t want to say complicated, but it’s, you know, not typically something that folks that are just having a regular kind of basic W2 job experience. But I was alluding to it before when I mentioned extensions, and that’s making estimated tax payments. So if you’re on a quarterly cadence where you know, your withholdings aren’t covering off on your tax bill, at the end of the year, whether you have side gigs, or it’s by design, you should be making estimated payments, those actually would have been due on the 15th of January. So hopefully, if anybody’s listening in, they’re supposed to make q4 payments and didn’t this will be a little reminder to go do that. But the other thing to keep in mind there is that even if you’re not making estimated payments, if you’re expected to have a balance due in April, you’ll want to make a payment against that before that date. So even if you do extend out, you know, get a rough number, do the math say hey, I think I’m going to owe approximately $1,000 make that payment now or any time between now and April. And then like I said, take the time, get your return figured out maybe that 1000 becomes 800. And you get to 200 of it back or, you know, you just buys you that time to really get things figured out. But you have the ability to make payments early anytime now for the 2023 season.

Tim Ulbrich  08:56

Yeah, and I think it’s really important. You know, for those that have been at this for a while they’re they’re probably well plugged into, hey, I can make IRA contributions after the first of the year, right before the deadline. I can make HSA contributions, but especially for, you know, our listeners that are relatively new at filing their own taxes or working with someone they may think which would be common sense that hey, calendar year is over. Therefore, opportunity’s gone. And as you’ve highlighted, that simply isn’t the case. And Sean, I also want to put a plug in when it comes to estimated tax payments -you mentioned this being a little bit more nuanced – and I think especially for those that have some more complicated tax situations, we’ll come back to this at the end. You can feel overwhelming in terms of you know, how do I determine that what’s the amount am I doing that correctly? What what changes are happening? And so I think this is a spot we’re really working with. Someone can be really valuable to feel comfortable and confident that you’re making those estimated tax payments. Yeah, in the correct way.

Sean Richards  09:50

We send out reminders to everybody that’s on that cadence and it might as well just be a reminder back to me because you know, all of our clients basically just say, I pay But we have the tools to go in and just you know, we have that number already figured out ahead of time. Usually it’s a little back and forth of hey, yeah, everything’s still the same, business still doing the same, you know, any changes on things, and we update our projections and get those numbers. But yeah, if you ever if you expect a big tax bill, or really have any kind of income, that you don’t have withholding for, that’s something you really should be thinking about. And if not working with a professional, at least having a plan to know what that number is going to be for yourself.

Tim Ulbrich  10:26

I get that email too from you, Sean. And then I say, hey, Sean, well, why don’t What is that supposed to be? So….

Sean Richards  10:31

I always push back a little bit to Hey, Tim, tell me about this. 

Tim Ulbrich  10:34

Yeah, that’s right.

Sean Richards  10:35

He’s telling me to go check the books, so we go back and forth.

Tim Ulbrich  10:39

Awesome. So that’s the first part we want to talk about is making sure that we use this window of time right to make any of these 2023 tax moves before we file. The second part is getting ready preparing for the 2023 tax season. So Sean, we preach and teach proactive tax planning. And we’ll talk about that here shortly. Most of the focus this time of year is getting ready to file for the previous year. What are some things that our listeners can be doing should be doing to get organized, and be prepared for filing, whether they’re doing it themselves, or again, they’re hiring a tax professional.

Sean Richards  11:15

Yeah, whether you’re doing it yourself or hiring a tax professional, you’re gonna need to gather the documentation and either have it for yourself or give it to somebody. So that’s the big name of the game right now. So knowing when you’re going to get things, you know, a lot of that is you’re sort of at the mercy of whatever businesses you’re working with. So if it’s a bank, and you have interest income, there’ll be sending out 1099s. If you work for a company, and you get a paycheck, there’ll be sending W2s, the deadline for most of those is January 31. So folks are probably starting to get them in the mail now, if they have a little bit more proactive payroll companies. 1099, typically, they’re due on the 31st are most of them are and you’ll see those right around the 31st. Because those are a little harder to get out. But there’s other things that you can be gathering now to that may not actually have sort of deadlines that are going to be issued by a company, but things that you can pull together yourself. So if you have a rental property, you know, have you been taking income and expenses and have all that stuff figured out? Or if you work with a property management company? Do you know how you can go get that? Do you have a side business? Have you been tracking income and expenses there, you know, if you bought a house or sold a house this year, you’ll probably have the closing documentation and everything and that stuff that you’ll need or again, your accountant will need. So one good way to start is to just look at what you did last year and kind of figure hey, I needed all these things last year, I’ll probably need those again. And then think what did I had as a change this year? And you know, what could that possibly bring up? Having a system in place is great, you know, if you’re a client of ours, we have a tax questionnaire that I’m sure listeners are rolling their eyes saying, Oh, no, not again this year, though. I do promise it’s a lot prettier than it has been in the past. I’m really excited about some of the changes we’ve made there. But you know, it really guides folks through Hey, did you have this happen? Did you have this happen? Things that you might not think about. Hey, Oh, I did. I forgot I sold that stock in January of 2023. Right, of course. So just kind of understanding what situations you had in your tax life for the year, what forms may or may not be needed from that. And then when you’re going to be getting them and who you’re going to be getting them from. And sometimes it’s not even things that you’re going to be getting right now. Like I mentioned, if you have a business and your partner with that a business or an S corp or something, you might not get your K1 until September 15 when that extensions due. So there’s a lot of things for planning purposes, you know, if you know that you are a shareholder of a business, you’re going to want to file that extension now because there’s a good chance you’re not getting that until the summertime or something like that. So it’s a lot to think about. It might be overwhelming for folks. That’s why it’s you know, really good to have a system or work with a professional. But starting with last year is always a good place to start. 

Tim Ulbrich  13:58

Yeah. And I found that to be really helpful. I use a combination of what you said. So I have a Google Drive, you know, folder for personal, for business, and I separate it by year. And then as those forms come in, you know, I’m scanning them, I’m dumping them into a folder just to kind of get them out of my mental space. And then exactly what he said, right, so I’m going through the tax questionnaire, which is super helpful to not only, you know, remind me of, okay, what were the forms last year that maybe I haven’t yet gotten or, you know, whatever, I need to look into that further. And then also asking those questions of are there new things that happen this year, and things that I need to be nudged and reminded of that might not have been represented in the documentation from the previous year? So I think a combination of the factors that you said, but that questionnaire I really like because that’s kind of the force point of are not only answering the questions, but then that’s the cue to upload all my tax forms and make sure that we have every documentation that’s needed, according to the questions that are being asked. 

Sean Richards  14:59

Yeah, and like I said people are probably rolling their eyes. And I don’t mean that because the questionnaire itself is bad. It’s more that people are probably thinking, Oh, no, I have to gather those documents again. But unfortunately, everybody has to do that regardless. So you might as well have something that’s going to guide you through and remind you. It’s nice because like I said, our system is battle tested, we’ve had it for years now. You can put things in and save it and come back. So if you say, Ah, right, I forgot I had that transaction in January of 23. I mean, we’re already a year past that, when you’re filing, we might be a year and a half past. So it’s always good to have that little reminder to go back and get things. 

Tim Ulbrich  15:36

As we’re talking about getting ready for the tax season. And the filing that’s coming up whether you know, that’s going to be the standard date or an extension. You know, the other thought I have here, Sean, is what new tax changes have been happening that folks, maybe or maybe not plugged into. And I feel like in years gone by, there’s been a lot more activity than than there was this past year. But talk us through some of the things that you’re seeing with our clients that our listeners might want to be tuned into.

Sean Richards  16:04

Yeah, I would say ’23 wasn’t the craziest year. I mean, it could just be with the election kind of coming up, maybe a lot of waves didn’t want to be made. But it also obviously comes down to Congress having to get things passed and making it through all of the checks and balances in the system. So we did have a lot of changes with the Inflation Reduction Act a couple of years ago that are kind of starting to roll out over the course of time. So I’d say that those were probably the biggest, year over year changes as far as actual real changes of like, Hey, this is a new creditor, this is a completely extended credit that used to, you know, phase out at $500. And now it’s 30%. with with no limits. So the name of the game with those is energies. Definitely still the big biggest thing. Energy efficiency, green initiatives. So people typically immediately think of EVs. I mean, that’s that’s a great example. And that’s one where the credits are sort of just getting better every year, there’s, more available to you. But even things that folks might not be thinking of. So if you had worked done on your house, there’s a pretty good chance that whatever you did was considered energy efficient by the powers that be and may qualify for at least some type of credit. So it’s worth at least thinking about, hey, I did this project, I replaced a window or I, you know, did some roof work or something like that, even just to ask the question of, Hey, can I get something for this? Worst case scenarios the answer is no. But you know, maybe next year or something. Aside from that, like I said, there weren’t a whole lot of crazy changes, there was a lot of increases across the board, just due to inflation with things like the standard deduction, and all of the kind of income brackets and everything. That’s not, you know, unusual, but it was a little bit more than it has been in the past, just given some of that inflation. And then there’s some new reporting requirements that know people are definitely getting fired up about. 1099k is a big one that gets thrown around a lot. So that’s with third party processors, if you work with like, Venmo, and things like that, and it scares people, because the question I get a lot is, hey, I, you know, send my dad 50 bucks every month for my cell phone bill, am I is he gonna get a 1099 at the end of the year for something like that? And the answer is probably not. The idea behind that is that third party payment providers, credit cards, Venmo, things like that are supposed to be identifying business transactions, because you know, you have that little button, you can click if you’re in Venmo, this is a business or purchase. And it gives you the insurance and everything, but it’s more intended for things like that. That’s not to say that you may get a 1099. Or it might come out of something like that, if you did give your family member $6,000 for something over the year. But that doesn’t also necessarily mean that it’s going to be income to that person. It’s just the company letting the government know, hey, this is the money that moved between these people. So a lot of things are getting thrown around. And you know, companies are trying to get people excited. So they’ll, you know, listen to their services and things like that. But I don’t want folks to be scared about these things. But definitely, you know, be inquisitive, ask your accountant, ask whoever you’re working with, hey, does this apply to me or you get something in the mail, ask them about it or you know, run it by somebody, don’t just say, Hey, I don’t think this applies to me. I’m not going to worry about it and deal with it later. 

Tim Ulbrich  19:26

So thus far, Sean, everything we’ve talked about is really for the upcoming filing, again, whether that’s April or whether there’s an extension in October, so let’s shift gears to talk about thinking ahead to next year. So the 2024 tax filing. And again, even though we haven’t yet filed for 2023, we’re making decisions right now that are going to impact that filing. So we want to be thinking and planning as proactively as possible. And this is a great time of year to be doing it. So what are some of the areas, Sean, that folks should be thinking about here for next year’s filing in 2024. 

Sean Richards  20:00

Yeah, I would be, you know, thinking about your own kind of general financial goals and then try to think about as you’re going through this whole tax filing process, how does your tax situation align with those goals? Or does it and if it doesn’t, should it and can we kind of shift it that way. So it could be something of, hey, I really want to pay off my student loans this year, that’s my my number one thing is that that’s what I want to do. So you might be more inclined to, you know, get more money in your paycheck in a particular year, in order to take that money and pay it against your debt, versus somebody who’s saying, hey, my number one goal by far is to lower my taxable income. And if that’s the case, you know, you don’t care about having your student loans paid off, or maybe you don’t have student loans, you just want your taxable income as low as possible. So we’re gonna max out 401K, we’re gonna max out HSAs or kind of, you know, do any of those types of things. So this is the time to really figure that out. Set goals for your tax situation that apply to your financial situation and overall strategy and also kind of come out of your tax return. Did you do your tax return and say, Oh, crap, I have a huge bill this year, I don’t, I don’t want that to happen. Or vice versa, oh, my goodness, I am getting a huge refund, I certainly could use that $1,000 a month back over the course of the year. This is the best time to identify those types of things and set those goals. And then from there, you can start to make changes, you can you know, if your goal is to not have a big tax bill at the end of the year, you can adjust your withholdings now and have 12 or 11 months of that to take effect. And by the end of the year, you’ll probably be in a good place. Or again, if you want to get more cash back to pay off your student loans, you can adjust your 401k or vice versa you want to lower your taxable income as much as absolutely possible, max out 401k. And now you have 11 months of that to go through. So it just a really good time to kind of get those goals set in place. Think about how you’re going to get there work with somebody who will build out a roadmap to get you there. And then just start checking in throughout the course of the year. It’s one of those things that once you file your taxes, I know everybody wants to say that they’re done. And it certainly is something you should celebrate. But it doesn’t mean that you should put it aside and not think of it till next year. Get those goals figured out now. And then, you know, constantly check in and make sure that you’re still on track.

Tim Ulbrich  22:25

Yeah, I like to think and we’ll talk about this with the services, we offer at YFP Tax. But I like to think about the filing is really the start line and not the finish line. Right. And, you know, as we talked about, in the very first section of this episode, there are some things that are calendar year deadlines, right? So we want to make sure that we’re taking advantage of those here in 2024. If it’s suitable for your plan, so that we’re not chasing it, you know, a year later, right, we’re able to really take advantage. And I think, as you mentioned, and highlighted well: it all starts with their goals. And this is why I’m so excited about the combination that we have of CFP and a CPA. When when you’re doing financial planning, and you’re doing that one on one and you have a CPA in your corner. That combination is really powerful as we can look across the financial planning and the strategy there, and then make sure we’re doing it in as tax efficient manner as possible. And just as a reminder, as I mentioned at the intro of the episode, we’ve got a checklist to kind of help guide you some of the things that we’ve been talking about, you can get a copy of that free checklist at your financialpharmacist.com/taxchecklist. And we’ll link to that, again in the show notes. Sean, let’s shift gears as we wrap up and talk about what we do at YFP Tax. Why we do it. By we I mean you!  The philosophy, the philosophy, the philosophy behind this service and I think it’s it’s such a good thread to what we’ve been talking about. Yes, we’ve got work to do. We’ve got to file the IRS says we have to do but we also want to be thinking ahead and thinking proactively so we’re really excited. We’re now more than a year in of the shift we’ve made to offering comprehensive tax planning what we call CTP in-house. Tell our listeners, what is comprehensive tax planning and what does that offering look like at YFP Tax.

Sean Richards  24:16

Yeah, I’m excited too.  It’s been you know about a year like you said of kind of having this as the flagship offering that we have on the tax side and it you know, I love where it where it’s been and where it is now and I love even more where we’re planning on taking it this year. But yeah, comprehensive tax planning, is just looking at your taxes kind of throughout the course of the year like I’ve been alluding to throughout this whole conversation. And one big thing there is will be kind of what you were just saying that filing taxes. It’s not always really the finish line and might also be the starting point for somebody else. It also is you know, could be the sort of middle of the year depending on what you have going on. Not everybody is on this exactly perfect cyclical cycle of hey Q1 of the year, which is this January, February, March, I’m going to be doing my full tax filings. And then mid year I’m going to be, you know, everybody, depending on what you have going on might be at different points in their individual tax cycle at any kind of point in the year. If you’re a business owner, you might not be filing your taxes until September, October. And then you know, you can’t be thinking about filing at this time of year when you’re going to be six months away from it. So comprehensive tax planning is really just having kind of a year round approach to your taxes and really catered to what you have going on. So again, where you’re at in the year, if it’s if it’s tax filing season, that’s what we’re focused on. If it’s more of that, you know, six months away from tax filing, we’re doing what we call tax projection. So we use a tool called holistic plan that we really use for our end to end tax process, which is amazing to have it all kind of in one place that we can carry over year after year. But with holistic plan, you have your tax return that you start with whatever is etched in stone sent to the government. And then from there, you’re able to sort of do whatever with testing out different types of scenarios and projections and looking at, hey, let’s take a look at our paychecks year to date, let’s see where are withholdings are at, let’s see what we expect our side income to be and our rental income. And oh, we’re going to have a kid this year congrats and, oh, we’re buying a house, let’s see how all these things play into our tax situation in the middle of the year. So we don’t come to whenever we file and say, Ooh, you know, I covered off on 75% of my stuff. But I kind of forgot about this whole other 25% here. So like I said, I love the projection process, I’m really excited to get into returns now and see exactly how accurate we were with them. And, you know, areas for improvement too. And not necessarily that we might have made mistakes or anything but looking at, hey, last year, we were really focused on the side income, but you know, you had more of an opportunity to be putting money toward your 401k and your W2 job that you had on the side there. So there’s just so many different opportunities to, you know, maximize your efficiencies with your taxes, you know, take advantage of all the things that are out there. And if you don’t have a year round kind of approach to it, and you’re not looking at it in a cyclical kind of way, you’ll miss those things, you’ll come to filing, and you’ll be kicking yourself saying, let’s do it better this year, let’s do it better this year. 

Tim Ulbrich  27:24

I think he’s you articulated so well. We’ve really designed the service to match the philosophy we have right, which is tax is not one and done. It’s something we need to be thinking about throughout the year to really optimize this part of the financial plan the best that we can and I think the service does that incredibly well. And we do recognize Sean, that CTP comprehensive tax plan. We recognize that it’s not for everyone, right. So you know someone who is listening that, you know, is single, they’ve got one W two income, that withholdings are clean set correctly, there’s not a whole lot of changes, they probably aren’t in need at least yet. In terms of year round tax planning service. So with that in mind, who are you seeing with the clients that you’re working with YFP Tax that are getting the most value out of this year round service? 

Sean Richards  28:11

I would say overall, you know, if you have a kind of a basic situation, that’s not typically the client that we’re seeing coming on and getting the most value out of it. That’s not to say that we don’t have plenty of people who want comprehensive tax planning, just to be able to say, hey, I don’t want to think about it. I just want someone’s hand on the wheel. And I want someone to take a look at my paycheck at the middle of the year and say, Hey, we’re still on track to have a $0 balance. And you know, we’re all good thumbs up and everything. There’s plenty of those. But I will say that the majority of folks are probably those who have slightly more of a complex tax situation or more of a complicated tax history or a little bit of both. So complicated tax history, think of things like big refunds or big bills, like I mentioned before, like, Oh, crap, you know, I’ve had a couple of years where I had big surprises that I wasn’t happy about, or I had that side gig and I completely forgot about that little thing called self employment tax, things like that. And then, you know, more complicated things. So real estate investors, tons of our clients have real estate, and there’s lots of opportunities to take advantage of tax laws there. And I don’t mean take advantage in in a shifty kind of way. There’s just so many different opportunities available to real estate investors out there. Folks with student loans, that’s obviously huge in the pharmacy space, stock purchase programs in restricted stock units. Another thing that’s huge in the pharmacy space, especially with our friends in the industry. So you know, those are definitely the biggest and then of course side hustlers and side gigs and stuff. But you know, I would definitely say that those are probably the biggest areas where we see people kind of proactively looking for that assistance. And like I said, just because your situation is uncomplicated doesn’t mean that you can’t benefit from having that year round look at it or if you anticipate it’s going to get more difficult getting ahead of that now, as opposed to, again, having that revisionist history and saying, Ooh, let’s hopefully not have that happen again, you know, to any extent you can get ahead of those things, it’s always a good thing in my mind.

Tim Ulbrich  30:14

Great stuff. And for those that want to learn more and determine, hey, is this a good fit for me, now is the time, right? So here in a little bit, we’re going to kind of shut down the doors and say, we’ve got to focus on really serving those clients well, so if you’re interested in learning more to determine, you know, for this year and beyond, can wifey tax add value to your tax situation, you can simply just go to YFPtax.com. From there, you’ll see an option to learn more and book a free discovery call that call will be with Tim Baker. And from there we can determine what the path is. That makes sense. And you know, Sean, just to be clear, you know, there are folks, as you mentioned, that might have some more straightforward situations, but want to know that someone has a hand on the wheel and want to know that they have someone in their corner year round, and that’s okay. But we aren’t and we’re not shy about it, we’re not trying to compete with big box solutions that are, you know, running commercials these days. 24/7 for, you know, free returns, right, very different apples and oranges, in terms of the level of service, the year round nature of it. And what we believe is, is really high touch as well. So again, learn more yfptax.com, you can book a discovery call, and we’d love to have the opportunity to discuss further. Sean, thanks so much. We’ll see you back in the spring perhaps when you’ve come out of hibernation well, not hibernation, because you’ll be working hard. 

Sean Richards  31:30

It’s the opposite of hibernation. I’m not quite sure what the opposite exercise to that is. Yeah, yeah, hopefully I will emerge and not see my shadow or however that works. I will, I’ll see you in a couple months.

Tim Ulbrich  31:42

Awesome. And at that point, we’ll recap some of the things that you’ve probably been seeing throughout tax season and how people can be thinking again more proactively and strategically ahead. So thanks so much, and we’ll catch up later. 

Sean Richards  31:53

Sounds good. Thanks, Tim. 

Tim Ulbrich  31:56

As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on podcasts, opinions and analyses expressed herein are solely those of Your Financial Pharmacist  unless otherwise noted, and constitute judgments as of the date published. Such information may contain forward looking statements which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacists Podcast. Have a great rest of your week.

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YFP 342: Replay – How Two Pharmacists Paid Off $250k of Student Loan Debt

Posted on by YFP Media

Kristen & Nate Hedrick share their journey paying off $250k student loan debt from the motivation to the role of side hustles and real estate investing.

Episode Summary

How do you go about aggressively paying off a $250,000 student loan debt without feeling overwhelmed? To help answer that question, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by fellow pharmacists Nate Hedrick, PharmD, and Kristen Hedrick, PharmD, BCACP. The Hedricks tell us how they successfully paid off over $250,000 in student loan debt, their motivation for tackling that debt, the pivotal moment that sparked making repayment a priority, and the role a side hustle and real estate investing played in their journey. After a brief history of Kristen’s background, listeners will hear what motivated the couple to take an aggressive stance on their debt repayments, how a life-changing event and one book altered their financial philosophy, and how the pandemic helped them focus on their strategy. Nate and Kristen share their reasons behind paying their debt off now instead of putting their money toward investments and how they found an additional $3,443 per month to make their goal attainable by reducing expenses and increasing their income. This earnest conversation takes us through the possibilities of working full time, raising a family, making investments, and paying off a huge debt, all at the same time. Nate and Kristen talk about their life after paying off this debt and share some advice for pharmacists who may be struggling with a similar debt situation.

About Today’s Guests

Nate and Kristen Hedrick met at Ohio Northern University and were married in 2013. Nate is a pharmacist with Medical Mutual and a real estate agent with Berkshire Hathaway. Kristen is a pharmacist with Bon Secour Mercy Health. Together, they graduated with over $300,000+ in student loan debt. They enjoy visiting National Parks as a family. Today they live in the suburbs of Cleveland, Ohio, with their two daughters, Molly and Lucy, and their rescue dog Lexi.

Key Points from the Episode

  • Kristen’s background, how she ended up in pharmacy, and what she’s doing now.
  • What their student loan debt looked like at its peak. 
  • How student debt can creep up and surprise you. 
  • The initial feelings the couple had towards their debt and their plans to pay it off. 
  • What motivated our guests to come up with an aggressive plan for paying back their debt. 
  • How a life-changing event (and a book) in 2016 changed everything. 
  • The global pandemic as a moment of inspiration.
  • What they had to change in their lives to be able to make the monthly repayments.
  • Paying off debt now versus investing for the future.
  • The way the couple used ‘double motivation’ to reconcile an age-old debate. 
  • How our guests were able to raise a child, invest, and pay off a huge debt at the same time.
  • Nate’s decision to pursue real estate investing and what that meant for their debt repayments. 
  • The approach the couple has taken to make real estate investing work for their family. 
  • Other strategies that helped to pay off the debt aside from cutting expenses and real estate investments. 
  • The benefits of receiving objective, third-party advice. 
  • What life is like now after paying off their massive debt.
  • How paying off the debt helped Nate make an important career decision.
  • Kristen’s advice for the pharmacist struggling with debt. 
  • Nate’s parting words of wisdom.  

Episode Highlights

“That was the worst that it got and, that same month, for what it’s worth, we had a negative net worth of $306,000. We had about 10k to our name and a bunch of debt to add on to that.” — Nate Hedrick, PharmD [0:03:44]

“I had no plan early on until we developed the ‘why’, which was getting our financial house in order so that we could live the way that we wanted to.” — Nate Hedrick, PharmD [0:06:23]

“The expenses were the catalyst, and then it was the extra income side of the equation that really boosted everything to actually make it possible.” — Nate Hedrick, PharmD [0:13:37]

“Spending more time with the kids without having that student loan debt, and being able to do more things and travel more, it feels like it’s definitely paying off in the end, with making some of those sacrifices.” — Kristen Hedrick, PharmD, BCACP [0:17:16] 

“One great thing about real estate investing is even if something happens, you still own a building.” — Kristen Hedrick, PharmD, BCACP [0:22:00]

“Find something that is going to supplement your life that the more effort you put into it, the more reward you get out of it. That is a really great way to set yourself up for success.” — Nate Hedrick, PharmD [0:29:32]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00.4] TU: Hey everybody, Tim Ulbrich here. Thank you for listening to The YFP Podcast, where each week, we strive to inspire and encourage you on your path towards achieving financial freedom.

This week, I had the pleasure of sitting down with Kristen and Nate Hedrick to discuss their journey of paying off $250,000 of student loan debt. In this show, we discuss their motivation and why, for aggressively paying down the debt. What the pivot moment was that motivated them to make the debt repayment a priority, how they were able to come up with more than $3,000 per month extra to throw towards the loans, and the role a side hustle and real estate investing played in helping them pay down the debt.

Before we jump into the show, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 240 households in 40-plus states. YFP Planning offers free only, high-touch financial planning that is customized for the pharmacy professional. 

If you’re interested in learning more about working one-on-one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call at yfpplanning.com. Whether or not YFP Planning’s financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

Okay, let’s jump into my interview with Nate and Kristen Hedrick to learn how and why they aggressively paid off $250,000 in student loan debt.

[INTERVIEW]

[0:01:23.4] TU: Kristen and Nate, welcomed to the show.

[0:01:24.7] NH: Hey Tim, good to be here.

[0:01:26.1] KH: Hi.

[0:01:27.0] TU: So Nate, obviously, you’re a frequent flyer. You’re old news so I’m not even going to spend a whole lot of time focusing on you. Many folks have heard you on the podcast before, whether it’s this show, talking about home buying, whether it’s the Real Estate Investing podcast on Saturday mornings, of course, Nate being the cohost of that show. 

So, we’re going to focus a little bit more on Kristen’s background as we get started, and we’re going to jump into more about your debt-free journey and how ultimately, you guys were able to knock out $250,000 of debt, and what that has meant to you guys personally, to your family, as well as also the financial goals and plan that you have going forward.

So, before we jump into that debt payoff and that journey, Kristen, let’s start with you. Tell us a little bit more about your background, what drew you into pharmacy, where you went to school and the work that you’re doing now.

[0:02:13.0] KH: Yeah, thanks. I had some extended family members in pharmacy so I just thought it would be a good career path, and looked at the different pharmacy schools and found my way to Ohio Northern in the middle of cornfields, and no cellphone reception and for some reason, that’s where I wanted to go. I think we all know it’s a great campus and community there.

So went to Ohio Northern and that’s where Nate and I met. I completed my residency here in Cleveland, Ohio. Now I work for a large health system doing population health on clinical pharmacy, and following patients with their chronic disease states and helping them with their medicines, and helping in here in Cleveland.

[0:02:50.8] TU: Kristen, it’s funny you mentioned the cellphone reception in Ada Ohio, Ohio Northern University. I remember, I maybe as a P3, P4, just a few years ahead of you guys, but  it was a big deal that they added a tower on campus, and I think we got one bar, maybe two bars, but not a whole lot going on in Ada Ohio. I had the chance to go back recently and take Jess and the boys. It was so fun to see campus and really relive some of the memories in that place. 

So Nate, tell us about the student loan debt at its peak? What were you guys working with and then, from there, we’ll get into more of some of the motivation and journey of paying it off.

[0:03:26.4] NH: Yeah. So, when we graduated and totaled everything up and, I think it was even a month or two after we graduated that I even wanted to look at it. Because it was the initial plan of, “I just won’t look at it and then it won’t be a problem.” And when we totaled it all up, looking back at our highest count, we were at $316,000 in student loan debt at one point. 

So, that was the worst that it got and, that same month, for what it’s worth, we had a negative net worth of $306,000, so we had about 10k to our name and a bunch of debt to add on to that.

[0:03:54.8] TU: I’m curious, did that surprise you guys? One of the stories I often share is that, it’s somewhat embarrassing, but when I was in pharmacy school, it felt a little bit like monopoly money, and it was all of a sudden when I crunch the numbers and I was like, “I owe how much, and how much interest, and what’s my net worth?” It just caught me off-guard, and it shouldn’t have. Were you expecting that or was that number somewhat a surprise at that point?

[0:04:15.4] NH: I agree, it was just totally like made up funds, you know? Every quarter or every semester, I’d have to go and submit for what I needed, and it was the tuition plus a little bit of living expenses, and I would just submit for it and it would get added into this imaginary pile of money somewhere, and I don’t think I ever checked the balance while I was in school, I don’t know why, I don’t know why I would have.

[0:04:35.7] TU: You’re dating yourself Nate, when you talk about quarters by the way. So that ain’t a thing anymore.

[0:04:40.7] NH: Old school, how I work. 

[0:04:42.7] TU: Kristen, tell us about the plan that you guys had for the student loans after graduation, after you got married in 2013. How did you feel about the debt overall and then, what was the thought in that moment about how are you going to pay this off?

[0:04:55.7] KH: I think our main thought was it’s overwhelming. It’s just such a large amount that it feels so ambiguous that we thought that we had this plan. We had always wanted to try to pay it off within 10 years. I think I was a little more on track of, “Oh, I want to pay this off in 10 years” and we had some advice from a previous financial advisor that had said, “Oh, it’s just student loan debt, everyone has it, it will be okay.” We changed it to 30 years so we could have minimum payments but always pay extra if we wanted to and, ultimately, we just found that that eventually did not work as well for us.

We needed a more targeted plan to get us on track with what we were doing. We had always been paying the amounts, but I think it was how we were planning to target to actually pay it off. It always felt like this end date that we were never going to get to.

[0:05:44.4] TU: One of the questions I like to ask folks, and we’ll talk more in a little bit about how aggressive you guys were to really get a chunk of this paid off, but I like to understand, what’s the why? What’s the motivation behind it? It’s one of these things, as you mentioned, you can take them out 25, 30 years if you want to. Obviously, you guys made a good decision to be much more aggressive. Tell me more about for the two of you, for your family, why was that important?

[0:06:08.2] NH: It’s funny you say that because I think until I had a why, it wasn’t important. Like I said, I didn’t look at it, I barely wanted to check it. I think at one point in residency, I put myself on the graduated repayment plan and my only motivation was because the payment today is lower and that seems like—that seems better, right? 

I had no plan early on, until we developed the ‘why’, which was getting our financial house in order so that we could live the way that we wanted to. Travel, work less, work in the capacities that we wanted to, all the things that have led us to this point. Until I had that in place, there wasn’t a why and it didn’t matter.

[0:06:42.7] TU: Yeah, I think that’s such a good encouragement for folks that are in the midst of their journey, or maybe have wondered into the repayment or for that matter, the financial plan at large, and feel like, “Hey, maybe I’m progressing but not as quickly as I would like to. I’m a little bit stuck.” Really going back to what gets us excited, right? 

The topic of money, money is a tool. So, what gets us excited, why do we care bout this topic of money, why do we care about debt repayment, why do we care about saving/investing for the future, why do we care about giving? And then using that as the motivation to drive some of the action and the plan going forward. 

So, Nate, what happened in 2016 that was really a motivation to say, “Hey, we’ve got to do something different?”

[0:07:22.0] NH: Yeah, that really is when it changed for us and, again, we’d been paying on them and, every once in a while, we get the idea that, “Hey, we should throw in some extra money because these loans are huge.” We would do it for a couple of months and I feel like we just were inconsistent. But in 2016, we got pregnant with our first child and, again, I tell this story on the podcast several times, but I read Rich Dad Poor Dad and it completely changed my mindset about money and what I wanted to do with money and what I wanted to do with my life and work, and just how I looked at finances.

It’s crazy it took that long to figure that out but I had no formal financial education. We go through pharmacy school, not business school, and until I read that book and changed how I wanted to approach finances in general, again, I didn’t have that why behind it. I didn’t have that motivation, so that’s what really jumpstarted us. I think it was a combination of, “Oh crap, we have a kid on the way and we have to pay for a lot of stuff” and again, this mindset shift that occurred, at least for me.

[0:08:16.1] TU: Kristen, I’m curious. I can just see Nate, because I know him now, I could see him like this totally nerding out over Rich Dad Poor Dad and coming to you with all these ideas and, “What about this, what about that?” Were you equally on fire in that moment or was there different motivations that really led you to say “Hey, we’ve got to do this differently?”

[0:08:34.4] KH: Yeah, I think I had always wanted to pay off the loan. Again, it was just so—it was a large amount that I think I didn’t know how to get there. When Nate said he read Rich Dad Poor Dad, he kept talking about it and talking about it. I think finally, in 2019, I read it, I said, “Oh, this is a really good book, I should have done it sooner”

So, I think we are a really good team together, in trying to work together and get those payments down, and Nate was very much more into it. I think at the time, I was like, I’m growing a human, I’m just going to keep doing what I’m doing, and that was the time that Nate entered real estate. He’s told this story before but, I’m six months pregnant and he goes, “Oh, I think I want to get my real estate license.” This is a time most people would have been getting board certified. 

He’s like, “I’m going to go get my real estate license.” He had classes multiple times a week and I’m pregnant, trying to take care of the house and do all these things, getting ready for a baby. So, it paid off in the end and I’m glad that he did it, but I think in the moment there was also that stressful situation for me, but he’s a jack of all trades. He does lots of things and keeps busy, so it’s good.

[0:09:36.0] TU: We’re going to come back to that in a little bit, of what role did that play, Nate, for you, in terms of pursuing that, as you call, a side hustle. It’s much bigger than that, the work that you’re doing now, obviously, but why was that so instrumental, and not only to the numbers but also to some of the mindset and the motivation behind the financial plan and the journey that you were on?

I want to first talk about, though, Nate, walk us through what happened in the pandemic that really allowed you guys to say, “Hey, we’re going to get specific about when we’re going to payoff a big chunk of this debt, what it’s going to take each month.” Talk to us about what happened during the pandemic that led you to the decision around how you were going to pay off a huge portion of that debt.

[0:10:15.5] NH: Yeah, so, like I said, 2016 is where we started getting pretty serious, but even then, it wasn’t truly resolute plan, right? It was just, “Okay, we really got to be focusing on throwing extra money at this” and we did a lot better. But in 2020, we had a month or two in the pandemic and realized, “Okay, we’re not traveling as much, we’re not going to be going out to eat as much, everything shut down, let’s use this time to take the extra money that we’re not spending and really attack that loan.” At one point and, again, we were talking this morning, it was right at the end of the year, we said, “Okay, this thing is not going away, let’s really use next year to just get rid of this loan.”

So, right in December of 2020 and going into the beginning of the New Year, we said, “Let’s figure out a number. What is it that’s going to take to get this loan knocked out at the end of the year? Who cares of the balances right now, we’re going to do it in a year, let’s make sure to get it done.” So, we did some crunching of some numbers and basically said, “Okay, if we can pay everything we’re paying today but also throw an extra $3,443 at the loan every single month, mine will be gone by the end of the year and it will be just knocked out.”

So, that number, I wrote it on the big note card over here and it became like—actually got it here, I’ll grab it. Here you go, so there’s the evidence, right? 3,443. So, that became—I put that everywhere and it became the mantra of like, “If we can do that every single month, this will be gone” and that was such a huge motivator for us.  

[0:11:32.8] TU: I don’t want to brush over that, because we’ll talk about it, I mean, that’s a big number, so we’re going to talk about the how of that, but tell us more about how you were able to get to that conclusion and get on the same page with that conclusion? What I’m specifically getting at here is, was it a, “hey budget status quo and we’re going to find ways to grow our income”? Was it a, “we’re going to cut some expenses”? How did you guys work through the details, Kristen, to ultimately say, “Yup, it’s $3,443 and this is how we’re going to do it.”

[0:12:04.5] KH: I think it was a little bit of a combination of both. During the pandemic, we had a little bit more interest. I think also, in doing some real estate investing and had an opportunity, we said, “Okay, do we take this money and do we put it towards real estate or do we pay down the loan more?” and eventually, we decide real estate, but we said, “Hey, like, maybe we should aggressively pay off our loan a little bit more if we are traveling and doing these things.” 

So, I think in December, we had a lot of discussion about it and both of us just decided yes, we both want that to be our goal, that starting January 1st, we really start cutting back on what we’re spending. I think, really, from any area that we could, we went thorough our budget, we scrubbed it. We said, “What are we spending money on, what are the subscriptions we have, what can we cut out, what can we save money on?” 

“Which of those little purchases can we just stop doing? Which things do we think that we need, can we actually hold off on buying?” and then, certainly, Nate’s side hustle helped with that as well. So, I think it was both a combination of, let’s cut back to really bare minimum spending. We weren’t eating out, we weren’t getting the extra cups of coffee from Starbucks, we weren’t doing the purchases at Target that said, “This is what you need, and this is in the dollar spot.” We just stopped all of that. And Nate worked as hard as he could with his real estate; it really is a motivator to keep putting that extra money towards it as well. 

[0:13:22.3] NH: Yeah, I think we quickly realized that trying to find for an extra $3,000 in the budget. We weren’t over spending by three grand every month, that was not it, so it became my challenge to say, “Okay, well, how can I work at this side hustle to really get us the rest of the way?” So, the expenses were the catalyst, and then it was the extra income side of the equation that really boosted everything to actually make it possible.

[0:13:44.7] TU: Yeah. What I love about that is, certainly, cutting expenses, especially short-term, if you’re focused on a goal, you were talking about debt repayment, can be really valuable but it also can be a grind. I mean, it can be soul sucking sometimes, you know? 

I think that one of the things I love about the approach that you took is that if you’re moving both sides of the equation, there’s a different level of momentum and mindset that come from that. Maybe the numbers aren’t as big for other folks that are pursuing ideas, but if you can both focus on, “Hey, how can we draw the income and how can we keep the expenses?” you all of a sudden feel like you’re picking up momentum in a significant way, but I don’t want to brush over that number.

$3,443 per month, that’s, for many pharmacist, if we assume, hundred, $120,000 of wage, it’s like, it’s about half of take home pay. I mean, for a lot of folks, we look at that at a monthly basis so that’s certainly commendable, and that’s a big number. Nate, I want to ask the question that I know the listeners are thinking, which is Nate, Kristen, you guys are smart. $3,443, why not invest that money? 

Why not put that out so we could see that grow and compound over 20, 30, 40 years? Like, how did you guys reconcile this ongoing debate, which is maybe a little bit of a moot point right now because the administrative forbearance, but this ongoing debate of, “Should I pay down the debt or should I invest for the future?”

[0:15:03.9] NH: Yeah. This is something we struggled with for years. Should we go out and buy another rental property or should we just take this money and throw it at the loan? That’s been the back and forth. Like Kristen was saying, we were evaluating whether we should be doing real estate or paying down the debt.

We challenged ourself to say like, “Can we do both?” and so, for me, again, working and trying to add extra income to the equation. It became a game of, “Okay, if I can make $3,000 a month extra, that’s going to get us there. But if I can make 4,000 or 5,000, that’s another couple of grand I can put at the real estate investing budget.”

So what we have, we had a bucket in LI, in our LI bank account, that was the real estate investing fund and we still have that, we still use it, it is a great way to separate our money. I had to pull from that in any month that I didn’t make enough income to really make the difference, I had to pull out of that. So it was like this, I was afraid to give it up. So it became a challenge to myself and to us. 

We need to cut our expenses and raise our income in a way where I can keep padding that account, that bucket, while also meeting our number. It was a double motivator of let’s get rid of the debt and I don’t want to lose sight of the other thing that I’m really passionate about. So, let us find a way to do both. 

[0:16:09.8] TU: Kristen, we both know that kids could be expensive. We love them, but it can be very expensive. I think one of the challenges folks have that are raising young family, whether it is debt repayment, whether it is achieving other financial goals, is it’s an expensive phase of life, right? 

The data suggested it’s multiples of hundreds of thousands to be able to raise a child, and I am curious of how you guys were able to reconcile this with young ones? I know you guys are so active and intentional as a family now. When you’re looking ahead to say, “Hey, this is a sacrifice now but it is going to allow us to really push our goals forward as a family later in the future.” Tell us about your thoughts on that. 

[0:16:46.9] KH: For sure. I remember being pregnant in 2016 and just thinking like, “Oh my gosh, I already feel like we’re living paycheck to paycheck, how are we possibly going to raise a child and afford daycare?” We even joke now, our big expense is mortgage. Childcare and student loan debt was there, our mortgage was the least expensive of all of those. 

So yes, certainly having kids is—we always felt like we knew we wanted to have kids and it was just figuring out how do we plan for that. I think, especially now, spending more time with the kids too without having that student loan debt and being able to do more things and travel more, it feels like it’s definitely paying off in the end with making some of those sacrifices or making those adjustments.  

Really, that mindset change, I was joking this morning, like you said Tim, it’s mindset changing. In 2021, we actually kept a list of things of, what are things we didn’t buy that we’re going to buy when the student loan is paid, and I was laughing because I’m like, “I still haven’t even bought these things yet.” We just found that maybe we don’t actually need them. 

[0:17:44.7] TU: Yeah and some of those behaviors. That’s what I always encourage folks, whatever goal you’re working towards, some of those behaviors you implement in that season will stay with you for the long run. Certainly, there’s a time and place to loosen the reigns a little bit and make sure we’re living a rich life today as well as planning for the future, but we’ll talk about what that looks like for you guys. 

But some of those behaviors can stay longer, which I think is really an incredible part of the journey. I want to touch on two things we’ve mentioned I think play a really important role to this journey, which is, number one, that you talk about the side hustle you had working full-time as a pharmacist, as a real estate agent that allowed you to accelerate some of the goals and momentum. 

Then the second being the investing in real estate, which much of our community already knows the work that you there on the Real Estate Investing Podcast but talk to us first about the side hustle as a realtor. When did you become a realtor, why did you become a realtor and you know ultimately, how have you been able to balance this while you are also at the time working full-time?” You are raising a young family, tell us about the decision to pursue that work and the role that it played and the debt repayment journey. 

[0:18:51.3] NH: Yes, I mentioned that mindset shift that occurred in 2016. I realized I needed something else that was going to be able to supplement my pharmacy career, something where I could put extra effort in and get extra reward from doing that, real estate became a natural fit. Again, it is mentioned a dozen times in Rich Dad Poor Dad and I started reading other things about ways to diversify income streams and, you name it, right? 

Real estate was in that conversation. I talked to my father-in-law who has been in real estate for years and he’s like, “You should just get your license.” At the time that felt like, “Well, that’s a different career. I can’t do that” but as I looked into it, it was actually a really reasonable option to supplement that. So I went, like Kristen said, to classes in 2016, got licensed in early 2017 and I assumed that everyone was all of a sudden coming to me, right? 

All my family and friends were going to flock to me and say, “Nate, buy and sell me a house” and it was, I think, eight months before I had a real client and actually closed the deal. I mean, it was a long time, and that’s because I wasn’t putting the right amount of effort into it and I wasn’t targeting what I needed to be doing, right? I wasn’t niching down and, again, that’s what led to the creation of real estate RPH and all the work that I do with pharmacists and the real estate community. 

All those things progressed down the road to the point where I am at today where, again, now I get to work with a bunch of active clients here in Cleveland. I help people all over the country with our real estate concierge service and it is a really cool way to put my passion for real estate into the world of pharmacy that I started out in and, again, it’s also been a great way for us to supplement our income stream just because it is something where I could put more effort in and get more dollars out as a result from doing that. 

[0:20:21.6] TU: Yeah. I want to put a plug in, just so you don’t have to as well, but I think that service has really been so valuable to the community. So, if folks are looking to buy a home, sell a home, looking to buy an investment property and they’re looking for an agent that would be a good fit for them. It is okay if you’re not in the Cleveland area where Nate is, he’s built a network of agents all across the country that have supported other pharmacist. 

So, if you go to yourfinancialpharmacist.com, you click on home buying, you’ll see a section for find an agent and from there, you can get connected with Nate further. 

Kristen, I want to ask you about the real estate investing side just because Nate talks about this on the podcast every week but I know, because I’ve seen it offline through some of the times I am talking with Nate, you guys are crunching numbers on the property and you’re on the spreadsheets punching numbers, “Is this a good deal, is this not a good deal?”

Tell us more about the vision that you guys have had for real estate investing for you as a family, why that’s been a good fit, and the approach that you’ve taken thus far in your real estate investing journey? 

[0:21:17.5] KH: Yeah, I think we always had an interest in real estate investing. You know, my family has some experience with that, like Nate mentioned, my dad is a realtor, so we knew its something we eventually wanted to do. It was just figuring out ,how do we put it in as part of our plan? But when Nate said he was interested, I was all onboard, but I was also that type-A risk averse pharmacist as in, “How do we do this? I have no idea.” 

I vividly remember a lot of my commutes, listening to Bigger Pockets, reading a lot of real estate books just to fill my brain with the information I felt that I needed to feel comfortable with real estate investing, and we always knew that we wanted to have those properties. I think one of the biggest things I had learned from Bigger Pockets was, one great thing about real estate investing is even if something happens, you still own a building. 

You still have something physical there that you could sell and we just—we always knew we wanted it to be something to supplement with one of our investments. 

[0:22:13.4] TU: Yeah, so right now you guys have property, correct me if I am wrong, you’ve got property in Northeast Ohio and then you’ve also got property outside of the area, correct? 

[0:22:22.0] NH: Yes, so we’ve got properties here locally and then some up in Michigan as well. 

[0:22:25.7] TU: Awesome, love that. And folks can tune in to the Real Estate Investing Podcast for more stories of other pharmacists real estate investors. So, we’ve talked about really three main buckets that were instrumental in paying off this $250,000 of debt and that was, I categorize it as hustle, cutting your expenses that more than $3,000 per month, growing the income through the side hustle, and then also looking at how you’re able to build a real estate investment portfolio. We’re there other strategies that helped you along this way of paying off this debt?  

[0:22:55.8] NH: There are little things. I think one that comes to mind for me is that we refinanced that loan, I think four different times, and a lot of that was because we were getting low interest rates every single time, and the other is because we were able to get big bonus. So, if you have been on any of the YFP resources for loan pay down or for loan refinance, you get cash bonuses depending on your loan balance. 

A couple of times we would go out and refinance it, wait a couple of months, refinance it again, and we’d get a check and a lower interest rate, it just made a ton of sense. So, that was a little thing that helped quite a lot along the way. 

[0:23:24.2] KH: I think another thing that really helped us was working with Tim Baker and the planning team at YFP. They were very much instrumental in guiding us through and helping us make the decisions. You know, I grew up putting my money under a mattress making sure it was nice and crisp and counting it every week. When we started this journey, Nate wasn’t financially savvy until 2016, when he got more into it after reading Rich Dad Poor Dad. 

So, I think working together in having a third party objectively look at everything and give us some guidance was really helpful as well. 

[0:23:55.9] TU: You don’t have to make Tim’s ego any bigger. No, I’m just kidding. I can see he is listening to that. So the question that I am begging to know the answer to is, you guys were throwing a huge amount of money at this debt. Obviously, at some point, you got that debt paid off and, all of a sudden, you’re not having to make that big of a payment anymore. I often think about this in the context of my journey and I often chalk it up to where did that money go. 

Well, more kids, kids got expensive, other things come along the way, but I also know you guys have been really intentional as a family about what are we trying to do in terms of experiences and how we want to be intentional with the resources and the money that you have each month. So, Kristen, talk to us about this journey after the $250,000 of debt, where no longer making this massive monthly payment. What’s happening? What are we doing? 

[0:24:43.5] KH: Well, we went to Disney World. I feel like that’s the most appropriate thing, you know? Honestly, in some parts, it feels like it hasn’t changed at all. We still have a lot of that mindset with being frugal and still saving for our future, but also trying to live in the moment, and we have done a lot of life planning as well and things that we want to do. I think we’re working on travelling more. 

Like I said, we went to Disney, hopefully some other trips coming up, just being able to spend more time with the kids I think. People with children understand that the first five years before they start school is just hectic and overwhelming. We were just trying to take in all these moments before they head to school officially. 

[0:25:20.1] TU: I love that. Right, it goes quick and everyone says that, but it’s real, and I think the intentionality around these experiences and making sure there’s the budget there to support those experiences and to be able to enjoy those moments along the way. Nate, you recently shared publically your decision to go from full-time to part-time work in your pharmacist role. So we’re going to officially call you a pseudo pharmacist now. 

[0:25:41.7] NH: That’s fair. 

[0:25:42.9] TU: How much of a factor was getting to this point of having this $250,000 of debt paid off, how much of a factor was that and being able to approach that decision and ultimately, feel confident in that decision. 

[0:25:55.4] NH: Yeah, it was huge. I mean, I can’t say that when we stared off that was the plan but as we get closer, we realized that it was a possibility, and I looked at the timing and I looked at where we were at and I said, “Look, this is like the last summer before our oldest goes off to kindergarten and then it is just going to get crazier and crazier as time goes on” So I took a step back and said, “Now that this debt is gone, we really can take a step back.”

Kristen has been so supportive and helpful in allowing me to do that, but it’s been really cool because now I can just focus on them for the summer and those extra 20 hours that I found every single week is just, I’m on the kid’s schedule. Like the other day, it was raining in the morning and so we went to the movies and we saw a kid’s movie and then we got out and I was like, “Hey, it’s sunny. Let’s go to the playground” and so we did that. 

It was just really cool to be on their schedule rather than some work schedule or something else that I had to do or had to get done. There wasn’t a timeframe anymore and that’s been really cool and again, without that debt being gone, there is no way we could have done that. 

[0:26:51.3] TU: Yeah, what I love is I think both of you are such a great example. Where yes, you’ve got a PharmD, yes, you’ve got residency training, yes, you could continue to climb certainly in various clinical roles and there’s the opportunities always there and will be there, but you also have some opportunity for flexibility in those roles and I think sometimes we don’t think creatively enough as pharmacist about how we’re going to use our time each week, and that can change season to season. 

I work with other pharmacists who went through a season with young family and others where they pivoted to part-time roles or more flexible schedules and then that changed the game at a later point in time. So I think there’s opportunities to make sure that we are coordinating our work plan with our life plan and with the financial plan as well. Kristen, I’ll start with you and then Nate, if you have other thoughts as well. 

I’m someone listening who, maybe I’m a student, and I am like, “Oh my gosh, thanks so much I feel depressed about the journey ahead” or maybe I am in the middle of the debt repayment journey and I just feel like, “When does this going to end?” or I feel like I am spinning my wheels. What advice would you have for pharmacists that are in that debt repayment journey as they’re trying to really navigate that path forward? 

[0:27:58.8] KH: Yeah. Not to sound cheesy, but I think a really big player, at least for me, was the YFP planning team. We felt like we had a plan but we weren’t really sure if it was a good plan, and really it was after I had our second child and I was listening to a lot of podcast. I was walking everyday on maternity leave and I was listening to podcast every time I would go for a walk and I was like, “We really need to look at this.” 

I feel like we need a more set plan as to what we’re doing, especially since you’re at such an integral point of your life where you want to be able to spend extra time with the kids, but you also may feel like you can’t financially do that, and so I think having that, like I said, that objective third party look at what you two are talking about as a couple can be really, really helpful, and also helped us look at a lot of our other financial plan with the investments. 

Like, can we get into more real estate investing, are we contributing enough to our 401(k)? Are we doing things that seem like we should be doing? I think that is really, really been a big impact on us on being able to achieve this. 

[0:28:55.0] TU: Nate, any other words of wisdom, advice you’d have to folks that are kind of in the thick of it, if you will? 

[0:29:00.6] NH: Yeah, I think for me, again, just for me at least, what were just this mindset shift away from being stuck at, “Okay, I only have—this is my income” right? “If I make a $110,000 a year as a pharmacist, that’s all I’ve got and there is no other opportunities and I have to make it work with that money.” I challenge everybody out there, and there’s a thousand and one different ways to do this, but you should find something where the more effort you put in, the more you get out of it, and it doesn’t have to be money, right?  

That can be just time, that can be time with your family, that can be things that you enjoy doing, whatever that is, find something that is going to supplement your life that the more effort you put into it, the more reward you get out of it ,and that is just a really great way to set yourself up for success. 

[0:29:40.9] TU: I love that. To reiterate what we talked about a little bit ago, the dollars are one piece of that, but don’t underestimate the momentum that comes from that as well, and that momentum is so important as it relates to the financial plan. You’re related to the debt repayment but I always stick to the other parts of the plan as well. Again guys, congratulations on knocking out this huge chunk of debt. 

Really incredible to hear the story and the why behind it and how you’re able to do it, excited for what lies ahead of you guys and thanks for taking time to come on the show.

[0:30:10.5] NH: Thanks Tim, we appreciate it. 

[0:30:11.6] KH: Thank you. 

[END OF INTERVIEW]

[0:30:12.3] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and it is not intended to provide and should not be relied on for investment or any other advice. Information of the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. 

Furthermore, the information contained in our archived newsletters, blog post and podcast is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analysis expressed herein are solely those of your financial pharmacist unless otherwise noted and constitute judgments as of the dates published. Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. 

Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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YFP 341: 5 Financial Moves to Make in 2024 with Tim Ulbrich

Posted on by YFP Media

Tim Ulbrich, YFP CEO, shares 5 key moves for financial success, emphasizing automation, proactive tax planning, document organization, and continuous learning.

Episode Summary

In the first episode of the New Year, YFP CEO and financial educator, Tim Ulbrich, unveils a financial roadmap for 2024, emphasizing five key moves for achieving financial success and living a rich life. Tim highlights the pivotal role of automation in financial planning, proactive tax planning, the importance of organizing financial documents and the significance of continuous learning. He shares his personal financial goals and the systems he uses to organize and prioritize his financial goals. Tune in to gain insights and actionable steps for mastering your finances in 2024.

About Today’s Guest

Tim Ulbrich is the Co-Founder and CEO of Your Financial Pharmacist. Founded in 2015, YFP is a fee-only financial planning firm and connects with the YFP community of 15,000+ pharmacy professionals via the Your Financial Pharmacist Podcast podcast, blog, website resources and speaking engagements. To date, YFP has partnered with 75+ organizations to provide personal finance education.

Tim received his Doctor of Pharmacy degree from Ohio Northern University and completed postgraduate residency training at The Ohio State University. He spent 9 years on faculty at Northeast Ohio Medical University prior to joining Ohio State University College of Pharmacy in 2019 as Clinical Professor and Director of the Master’s in Health-System Pharmacy Administration Program.

Tim is the host of the Your Financial Pharmacist Podcast which has more than 1 million downloads. Tim is also the co-author of Seven Figure Pharmacist: How to Maximize Your Income, Eliminate Debt and Create Wealth. Tim has presented to over 200 pharmacy associations, colleges, and groups on various personal finance topics including debt management, investing, retirement planning, and financial well-being.

Key Points from the Episode

  • Financial moves for 2024, including saving and automation. [0:01]
  • Balancing financial goals with living a rich life today. [3:04]
  • Proactive tax planning for financial success. [8:21]
  • Common tax mistakes and planning for tax season. [12:19]
  • Organizing financial documents for peace of mind. [14:43]
  • Automating financial planning for maximum profit. [20:19]
  • Prioritizing sinking funds for various financial goals. [25:21]
  • Prioritizing savings goals using a systematic approach. [28:24]
  • Financial moves for 2024, including automation and learning. [34:36]

Episode Highlights

“I get excited with the turning of the page into the new year. Not as a complete reset, but as an opportunity to really look more closely at the priorities that have determined to be most important to me, personally and professionally.” –Tim Ulbrich [02:22]

“Now tax in my opinion, is one of the most under appreciated and overlooked parts of the financial plan.” –Tim Ulbrich  [08:27]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRO]

Tim Ulbrich  00:01

Hey everybody, Tim over here. And thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week I kick off the new year by covering five financial moves that you can make in 2024 to jumpstart your financial plan. So whether your plan is humming or you’re looking to get refocused and back on track, my hope is that this episode will challenge and motivate you as you set your own goals and plan for 2024. During the show, I talked through why it’s important to set a plan that includes both saving for the future and living a rich life today, I discuss an often overlooked part of the financial plan that perhaps needs more love and attention, why automation should be a key part of your financial planning strategy, and much more. Before we jump in, I want to let you know about a free webinar that I’m hosting coming up on Monday, January 8, at 8pm/Eastern, it’s gonna be a party, and I don’t want you to miss it would love to see you there. During this webinar, master your money in 2024. I’m gonna cover my playbook going from $200,000 in debt to becoming a seven figure pharmacist. Specifically, I’m going to cover how to get clear on your vision for living a rich life, the system and money management routine that we use to get out of debt and save our first million, how to automate your plans, so you aren’t wondering if you’re on track to reach your goals, and how to determine your retirement numbers. If you can’t make it to the webinar live, no worries, we’ll send out a replay to those that register. But if you do attend live, you’ll have a chance to enter a giveaway where two live attendees will be selected for one of the following: $100 Amazon gift card or a YFP bundle including YFP tshirt, YFP pullover and your book of choice. You’ll learn more about the webinar and register your yourfinancialpharmacist.com/2024. Again, that’s yourfinancialpharmacist.com/2024. Alright, let’s jump into today’s episode, five financial moves that you can make in 2024.

Tim Ulbrich  02:03

Hi, there, Tim Ulbrich here and Happy New Year! I’m so excited to be kicking off 2024 with you here on the YFP podcast. Thank you so much for listening and for joining the show. I hope you had some time over the last several weeks to reflect on 2023, think about what’s ahead for 2024, hopefully unwind and spend some time with loved ones as well. I get excited with the turning of the page into the new year. Not as a complete reset, but as an opportunity to really look more closely at the priorities that have determined to be most important to me, personally and professionally. And to make sure that the schedule and activities align accordingly. And I hope the same is true for you. And as we talk about that turn into the new year, as it relates to the financial plan, I’m going to cover five financial moves that I think you should consider implementing here in 2024, if you’re not already doing so, in your own financial journey. We’re going to talk through each one of these in detail. I’m going to talk about how I’ve implemented this in my own life as well as why I think about each of these five areas really is core to your long term financial success. 

So let’s kick things off with number one, which is making sure that our financial goals strike the balance between living a rich life today, as well as planning and saving for the future, right? We need to be thinking about tomorrow, we have to be planning and saving for retirement, making sure that we’re focused on moving our net worth in a positive direction, net worth being our assets, minus our liabilities, making sure that we’re taking care of our future selves saving for retirement filling those investment buckets, all of those things are a priority. And I hope you have some plans and goals around those in 2024. But let’s not lose sight of those goals that help keep us focused on living a rich life today while we’re planning and saving for the future, while we’re planning for tomorrow. So perhaps for some of you listening, you’ve long dreamed about a certain experience that has taken a backseat to the busyness of life. Maybe that’s as small as a weekend getaway. For those that have young kids, I know how difficult that can be. Or perhaps for some of you this is a big stretch goal, may be something as big as a year off, traveling the world having those lifetime types of experiences, those bucket list type of experiences that are most important to you. 

You know, I think back to Matt and Nicky Javert that we featured on the podcast that traveled the world. Nick Ornella that took a year off from his job as community pharmacist to travel the world. We’ll share both of those episodes in the show notes. So no matter where your experience or goals live, there is no right or wrong. Each of us are on our own journey. Perhaps it’s something that’s experienced focus that hasn’t been a priority that you’d like to make a priority in 2024. But how about those interests, or hobbies that we used to long for and prioritize that have gotten lost again and that busyness of life and work? So for me in 2023 This wasn’t a financial expense, but it was something that brought great joy. One of the activities that I wanted to pursue was getting back into playing volleyball, something I had done competitively throughout high school, something that the busyness of life, other priorities and work just fell by the wayside. And I did that through a local rec league and that brought incredible joy to me throughout the winter. Or what about that side hustle business or project that you’ve been dragging your feet to take the first step on, or perhaps volunteering or giving opportunities that have gotten lost in the shuffle of other priorities of the financial plan. 

So let’s make this year the year that we move the needle on both yes, those long term savings and investment goal saving for our future selves, while also prioritizing living a rich life today. Now, here’s the reality when it comes to setting and achieving our goals, many of us probably need to simplify and clarify our goals to put them in focus. There’s lots of competing priorities, regardless of the stage of life that you’re in. And so I would encourage you to put them down on paper, something that we’ve been doing inside of the YFP plus community last month in December of 2023, was writing down our goals in a measurable time oriented way over the next one year, two to three goals in each of the four areas that mean most to us and our own wellness, of course, finance here, we’re talking about one area of wellness, and sharing that out with one another as a mechanism of both accountability to do the activity, as well as hopefully encouragement and accountability and achieving those goals. So put them down on paper, identify two to three financial goals that you want to achieve over the next year. And again, yes, we’ll have some of those objective things, right saving for the future, investing in 401Ks and IRAs and all those types of investments. But I would challenge you: do you also have components of your financial plan that are aligned with living that rich life today? So we’re not talking about being specific, I’m referring to having a what, to having a when, and to having a why. To having a what, a when, and why. So for example, for us in 2024, one of the experiences we’re hoping to achieve is to go out west to visit some of Jess’s family in Montana in the summer of 2024. We know that’s an expense, right? Traveling from Ohio to Montana, we’ve got four young boys, whether we fly whether we drive, experiences along the way, that’s going to be a large expense. So when it comes to us, that might look like something that hey, by June 1 of 2024, we will allocate $5,000, so that we can take that trip out to Montana, and have that experience with our boys and be with our family, though that’s out there, right? We’ve got a what, we’ve got a when, and we’ve got a why. When we have a what, when and why, we can start to not only make that goal come to life, but we can implement that in a monthly plan to see what it’s going to take for us to be able to achieve that goal. And we’ll talk more about that later on this episode. 

So again, before you set your goals for the new year. Get clear on the why right? Do your goals motivate you do your goals inspire you and for those that are you that are doing this together with a significant other, a partner or spouse, starting with the goal, starting with the vision, starting with the dreams and getting aligned in those areas, is going to really help the rest of the financial plan to flow. So that’s number one on our list of five financial moves that you can make in the new year, making sure that your goals include and strike the balance between living a rich life today, and planning and saving for the future. 

Alright, number two is taking your tax strategy to the next level taking your tax strategy to the next level. Now tax in my opinion, is one of the most under appreciated and overlooked parts of the financial plan. And I want you to think about tax as a thread that runs across your financial plan, perhaps one that maybe you’re not thinking enough about that. Ideally, we are proactively considering and evaluating when we are making our financial moves. Now this sounds so obvious, but I historically previously have viewed tax very much in the rearview mirror, right we have to file by April 15, or thereabouts each year to meet the IRS requirements. We don’t want the IRS coming knocking at our doors. And when we do that we are accounting for what happened in the previous year. Now thankfully, because of our tax team, because of our attention and focus on this topic, I’ve become much more proactive in my tax planning as a part of the financial plan. But in years gone by, we would file our taxes and then we’d hold our breath right? Are we going to get a refund? Or are we going to have taxes that are due do we do we do our withholdings correctly based on differences in charitable giving from one year to the next right all of these factors? 

I didn’t have a great picture on come that time of tax filing, what was going to happen, right, and that is less than ideal when it comes to optimizing this part of the financial plan. It’s so again, we need to shift our attention from tax preparation to tax planning. One is proactive. One is reactive right again when we go to file and we complete that paperwork whether you do that yourself whether you hire professional that is looking backwards if we start to think more proactive, hopefully at the point of filing, yes, we’re going to do that work, we have to do that. But we’re then looking ahead to say, hey, based on that information, based on the rest of our financial plans, based on our personal situation, based on changes that we know are coming or goals that we have, what can we be doing strategically in advance throughout the rest of the year, to make sure that we’re paying our fair share of taxes, but no more. So if you don’t already know your key tax numbers, I’m referring to things like marginal tax rate, effective tax rate, adjusted gross income, let’s make a commitment this year to get started and to learn more. 

Now, I would love if you would get out the IRS Form 1040, we’ll link to it in the show notes. And just spend 10 to 15 minutes to make sure that you understand the terminology and the flow of dollars. I get it. It’s nerdy, right. And whether you like this subject, or you don’t you do it yourself, you hire someone else. Understanding these numbers and understanding the flow of dollars, and what those terms mean and how it ultimately affects your marginal and your effective tax rate is going to be really important as you think about the strategies, and you’ll be able to directly see how certain strategies you can implement in the financial plan are going to have an impact on the overall taxes that you pay. So as one example, AGI adjusted gross income has huge implications for those that are going through student loan repayment, right income driven repayment calculations, especially for those that are pursuing the Public Service Loan Forgiveness strategy, your adjusted gross income is directly tied to the monthly payment that you’re going to make under student loan. So if we understand that, we can then start to think about, well, hey, are there strategies I can use that can perhaps reduce or lower my AGI adjusted gross income? Not by making less than one do that, but by making contributions to things like traditional 401 K or traditional 403B accounts? Or how about health savings accounts? Right? These are types of things that can reduce our taxable income, therefore reduce our monthly student loan payment, which is a great thing, especially for those that are pursuing tax free loan forgiveness, all the while we’re accruing tax deferred savings into the future. Just one example of how important the proactive planning can be. 

Now on episode 309 of the podcast, we’ll link to that in the show notes. Our CPA and Director of Tax Sean Richards covered the top 10 tax blunders that pharmacists make. So whether you have a negative net worth, or you have several million dollars saved, I think you’ll find a lot of value in that episode. Sean, reflecting on the recent tax filing season, where he filed he’ll correct me if I’m wrong, I think over 200 something returns for the different clients that we worked with. And what he saw as the most common mistakes that pharmacists were making. Some of those things, including having a surprise bill, or refund due at filing, probably the most common thing that we see, including some of the surprises that are causing that issue, right. And so what we want to be doing ideally is we’re shooting for zero, we don’t want to have an interest free loan that we have out to the government. And we also don’t want to have a surprise bill that’s due that we’re not ready for. So what are the common things that cause that refund or cause that bill so we talked about that on that episode. Another common mistake he discussed was pharmacists not employing a bunching strategy for charitable giving. So for those that are giving, especially giving at a significant level, and aren’t following the standardized deduction, Is there perhaps some strategy in the in the bunching of charitable contributions that can reduce one’s tax rate. He also talked about a common mistake he saw a new side hustlers and business owners not planning for taxes. 

So earning income and being surprised by not paying estimated taxes along the way. We talked about under estimating the power of the HSA, the health savings account and an oldie but a goodie, not factoring in public service loan forgiveness when choosing tax filing status as married, filing separately or married filing jointly. So make sure to check out that episode episode 309. And easy to see as you hear some of those common examples why having a proactive tax plan is worth its weight in gold. Now, as we turn the page into the new year, this is a great time to be planning, right?  We’re getting ready to go into tax season that mid April deadline that we talked about. So now is the perfect time to be thinking about the upcoming tax filing season. Our tax team is ready to help, yes with the filing, but also as I discussed here, with proactive year round tax planning. We do that through our comprehensive tax planning service you can visit YFPtax.com to learn more, and to see whether or not those services may be a good fit for you. Alright, so that’s number two on our list of five financial moves to make in the new year. Take your tax strategies the next level. 

Number three is button up your financial documents. Button up your financial documents. Now getting organized with your financial records, I believe plays a significant role, not necessarily in terms of moving the needle on your net worth, but in making sure that you and others have access to all of the information that you need to make informed decisions with the financial plan. So think for a minute about all the financial accounts that you have out there, all the different documents, insurance policies that touch a certain part of your financial plan, the list quickly grows to one that is overwhelming. And the more you operate in your own system, the longer time goes by where you’re operating in your own system, the easier it is for you to navigate, but perhaps harder for others to navigate and unravel, should they need to do so in the future. And that’s where this concept of buttoning up your financial documents comes in. That’s where this concept of a legacy folder comes in. I first heard of that idea of a legacy folder, when I took Dave Ramsey’s Financial Peace University probably 10-12 years ago at this point at our local church. And I remember walking away thinking, wow, that is so simple. So obvious. Why haven’t I done that yet? Why haven’t Jess and I done that yet, as a part of our own plan. So essentially, the idea of a legacy folder if that’s a new concept to you, whether it’s a physical folder, and electronic folder, or a combination of both, it’s a place where you have all of your financial related documents. So in the event of an emergency, others would be able to quickly access your financial situation and not just access but be able to pick up and understand what’s going on and to be able to make key decisions in your absence. So we just went through updating this and shifting everything to an electronic version. So that in the event of something that happens to Jess and I those caring for our boys, along with the financial planning team at YFP have access to all of the necessary information. So here’s how we have organized it certainly not the only way to do it. But here’s how we have organized it in a combination of Google Drive, and a safe at home that has a passwords, all of our passwords stored in a One Password account. So we have nine different sections, I’ll describe them briefly, this sounds overwhelming, it did take a commitment of time to get started. It takes a commitment of time to update. But I will say there’s an incredible feeling of peace and momentum that comes from having this done. 

So section one for us is what we refer to as important documents, okay, birth certificates for us, for our kids ,social security cards, marriage certificates, passports, all of these we have in a fireproof safe at home. And we have them just referenced as being there in the electronic version that we share with the financial planning team as well share with those that would take care of the boys in the event of our absence. So that’s section one important document.

Section two is all of our insurance policies and information – auto insurance, homeowners insurance, umbrella insurance, health insurance, long term disability, term life insurance policies for myself, for Jess, for the business, etcetera. 

Section three is estate planning documents. So we have a hard copy of these in the safe that have been notarized and electronic version that’s uploaded in the Google Drive. So these are things like the revocable trust agreements, health care power of attorney living will last will and testament. 

Section four is the car titles. Now, I’m not sure how valuable these are given our current condition of our Swagger Wagon, but they’re there nonetheless. So section four is the car title. 

Section five is our home ownership documents. So this is the deed to the home, our home equity line of credit or HELOC information, we have another copy of homeowners insurance policy here just so it’s all contained in one section. 

Section six is a summary of our financial accounts, our net worth tracking sheet, as well as our Social Security statements. So I’m going to talk about more of this in the webinar on January 8, and actually kind of show you the system that we have set up. But here I just have a quick summary, think of it as a table of contents of all of our financial accounts that are out there. So for example, we use Ally for checking and savings accounts, where we have our treasury bonds, where we have our different investment accounts, 401K’s, IRA accounts and so forth. So it’s just a quick summary of what is the account type, where’s the account. And then as I mentioned, we store all the passwords in a separate secure One Password account. We also have in this section, a net worth tracking sheet. So each month, we track all of our assets, all of our liabilities, we add those up assets minus minus liabilities equals net worth. And we’re tracking our progression of net worth over a period of time. So it’s a way that Jess and I can just quickly look at a 20,000 foot view of where’s our overall financial health whereas the overall trajectory of the net worth. 

Section seven is our tax returns for personal and business tax returns. 

Section eight is all of the records related to the business. So a summary of the different entities, legal documents, operating agreements, buy/sell agreements, etc. 

And then section nine is just a miscellaneous so information about utilities and other accounts that don’t fit in the previous sections. Again, it takes time to get that started, but it’s something that you can act upon pretty quickly in the new year, and I encourage you to set an annual recurring reminder, whether that’s the turn of the new year, perhaps it’s daylight savings time or something else, that you just remember to update those documents as needed periodically. 

Alright, so that’s number three in our five financial moves to making 2024, button up your financial documents. Number four is my favorite. This is the area that I think has moved the needle the most for Jess and I, in our financial plan over the last decade or so. And that is automation, making sure that you have a system and ideally a system that is working for you. Now, when it comes to automating your financial plan, again, I think just like the legacy folder concept we talked about, it’s so obvious, so effective, so easy to implement. But many people I don’t think are optimizing this. So think of automation, as the mechanism by which your income is working for you. And it’s automatically funding the priorities that you’ve already set, and determined to be most important in advance. Now, I know I’m not alone, when I say that I was feeling for some time that there are multiple financial priorities that are occurring at once that are swirling around in my head. And it can be overwhelming to think about what are those priorities? In what order? And how do we allocate the limited resource of limited income that we have to those? Should we focus on one? Should we focus on two? Should we focus on three? And so much of the stress around the financial plan, I believe, is from all of that unknown, and anxiety swirling in our heads, right? If we can get that down onto paper, and if we can start to put some numbers and a plan to it and prioritize it, we may not always like the outcome of how fast we may or may not be able to achieve those goals. But once we have a plan, once we articulate it, once we know we thought about it, we prioritize it, I think there’s a lot of clarity and momentum that can come from that. So automation helps put those goals into action. It takes the stress out of wondering whether or not they’re going to happen. So whether it’s saving for an emergency fund, whether it’s saving for a vacation, paying down debt, whether it’s student loan debt, consumer debt, auto loan debt, mortgage debt, whatever type of debt, whether it’s saving for retirement, saving for home, saving for investment property, automation helps identify and prioritize these goals and assign your income accordingly. Yes, it takes a bit of time to set up, perhaps not as much as you may think, because you hear about it. But once it’s set up, it provides a long term return on time benefit, but also better yet, as I mentioned peace of mind and feeling of momentum knowing that you’ve thought about prioritize and have a plan in place working itself to fund your goals. 

Now, Ramit Sethi talks about this in his book, I Will Teach You To Be Rich, he does an incredible job of teaching automation credit to him. And he says that automating your financial plan will be the single most profitable system that you’ll ever build. And I remember hearing that and thinking, Man, that’s a big, big promise, right? But it is 100% true. Automating your financial plan will be the single most profitable system that you’ll ever built. So if you’re not already doing this, I want you to imagine a future state. Imagine a future state where your financial goals and priorities are clearly defined. You’ve determined how much of your monthly budget is available for these goals. And you have a system in place to automatically fund these goals every month so you get paid and your money is being distributed automatically. Paycheck comes in dollars are being funded to the goals that you’ve already determined and prioritized to be most important. Okay, so what does this look like? Here’s how Jess and I are currently implementing this. Now, previously, we adhere to a zero based budget, which I think really did help us laser in and focus on our expenses and account for every single dollar that we earned. That’s the premise of a zero based budget. I think that method works out really well, especially when you’re getting started or feel like you need to get back on track. But over time, we’ve loosened this up knowing that once we account for all of our monthly commitments, right, our monthly commitments, being mortgage insurance, property taxes, giving, groceries, subscriptions, utilities, etc. Once we account for those, and those are largely fixed, outside of some variation in utility payments, we have a certain amount of funds after we account for those things that we know can be allocated in two general buckets with several options within those two general buckets. So what are those two general buckets? General bucket number one is what we call everything else. So this includes things like gas, miscellaneous trips to the store, family experiences, family entertainment, eating out, et cetera. And we track this, Jess and I track this, in a shared Google Sheet. And I’ll talk more about this in the webinar on the eighth and what the system looks like. That just helps us make sure we don’t overspend this category. Okay, so we started with our total income. We define our total take home income. We then define, as I mentioned, all of those fixed expenses and aren’t really shifting too much from month to month – mortgage, insurance, property taxes, giving, groceries, subscriptions, etc. And in days gone by that would also have been debt payments. And then what’s left over, we’re going to allocate into two general buckets and what I’m talking about is this first general bucket of everything else. 

The second general bucket is what we think of as our sinking funds. It’s the second bucket of funds that we want to predefine prioritize, set allocation amounts, and then set up auto-contribution of funds. So what do I mean by the sinking funds? Okay, so for us in 2024, the areas that we’re focused on are funding an HSA, I’ll talk about each one of these more detail, finishing our basement, funding that 2024 vacations, as well as saving for a summer vacation 2025, funding our Roth IRAs, funding the next car purchase, and then thinking more about the boys 529 funds for college savings. So for us in 2024, as we sat down and thought about what is the greatest priority, those are the things that rose to the top that we wanted to fund with these bucket two funds that I’m referring to, right, the sinking funds. So in this scenario, and within our discussion of automation, we would look to estimate the available pool of funds per month or per year divided by 12, we would then prioritize the list, determine the allocation order in the amounts. And then as I mentioned, we would automatically fund those and set up a recurring contribution. So for example, let’s walk through this let’s say that we assume that for the year, let’s assume we have $3,000 a month, or $36,000 for the year available to disperse across these bucket two goals. So again, I’m not talking about the expenses that we know we’re going to fund every month, we talked about that mortgage, insurance, etc., property taxes. I’m not talking about that everything else bucket that we know a certain amount for family experiences, for gas, other trips that we may take out. I’m referring to this bucket of sinking funds. 

So let’s assume we have $3,000 a month or $36,000 a year to put towards the sinking funds. Now for some of you listening, you may think, Hey, we’ve got a lot more. That’s great, right? We want to be intentional with that. And for some of you, you may be thinking, Wow, we got a lot less, right? And so we have to focus on again, everyone is on their own journey. So how do we take this $36,000 a year? How do we take this $3,000 a month if we use that as an example, and disperse that across the different goals I just talked about: HSA funds, finishing the basement, Roth IRAs, car fund, etc. So for us, the HSA is really a top priority, not just because of the triple tax benefits. I know we’ve heard about that on that on the show before. But since we have a high deductible health plan, and we have four active boys, right, so we really need to minimize our risk there. And we’ve got a really high deductible as well as a high out of pocket max. So we know that we want to max that out and 2024. That’s $8,300 a year as a family contribution. And so we were going to do that as priority number one. So once we fund that HSA< again, we started with $36,000 a year, we fund, fully fund the HSA $8,300/year,  we’re now left with $27,700. So working down the list, what’s priority number two? So for us priority number two is finishing the basement. Now we’ve been planning for this for years. And we’ve decided that based on this phase of life we’re in we’ve got boys ages 12 to four, it’s a great time that we want to make the most out of the space and we want to really make this project happen. For us, it’s the example I’ve referenced in financial move number one, right? Finding that balance between saving for the future and living a rich life today. Now, does finishing the basement financially make the most sense, right? Does does it objectively may make the most sense when we compare it against other types of things like Roth IRAs, or 529 funds, and be able to save and invest for the future? The answer is no. Right? It doesn’t objectively rank higher, any money that you’re going to save and compound over time is going to beat any expense, right? That’s just an objective fact unless that money loses a significant amount as you invest it. But as we step back, and as we look at for our family, finding that balance between living a rich life today, as well as planning for the future, as we look at the progress we’ve already made towards retirement savings, we’ve decided that in fact, we’re going to make this a priority over some other investment and savings accounts. Now, to be frank, I wish we would have done this sooner. And so we’re going to pull the trigger and make this happen in 2024. So for this example, let’s assume that it’s going to cost $25,000 to do the project. And let’s assume we already have $15,000 saved so we need $10,000 more to get the project done. So again, we started with $36,000. We fully funded the HSA at $8300. We’re going to now add another $10,000 in the basement. So we’re left over with $17,700. 

Moving down the list of priority number three. So continuing this theme of finding that balance between living a rich life today and tomorrow, we want to prioritize two family experiences in 2024. One being a summer trip to the Fingerlakes that we take with my family. We’ve done this for several years. And another being a trip out west to Montana, I mentioned that a bit earlier. So let’s assume for both of those, that’s going to cost a combined $7,000. So after we subtract that, we now have $10,700 left. 

Moving down the list. Next up for us is Jess’s Roth IRA, that’s going to cost $7,000 to fund and max that out and 2024. After we do that, we’re left with $3700, then let’s just round this out by assuming we’ll allocate the remaining amount to my Roth IRA to do a partial fund. Now, you can see this system and process that we worked through right, we identified the total estimated annual amount, you can do the same thing, divide that by 12 for monthly. We listed out the goals, and we match those up to prioritize accordingly. 

Now, here’s the disappointing part. Or perhaps, depending on you look at it, it may be exciting is as I do. In this example, we have fully funded several goals, right? We fully funded the HSA, we fully funded finishing the basement, we fully funded to 2024 vacations, we fully funded just as RIA, we partially funded my Roth IRA. But we had several things that I mentioned that were left unfunded, okay? The kids 529 accounts and the summer 2025 vacation, as well as the next car fund. So we have a couple options here. We can go back to the drawing board and redistribute right, lower some of the other ones and partially fund some, and then have others that we are able to partially fund. Or we can stay as is knowing that if additional funds become available, right, whether that’s in the form of for us additional income, it could be tax refunds, although hopefully we’re doing a good job planning and that’s not the case. It could be side hustle income for some of you. It could be picking up extra hours, it could be gifts that you receive, whatever might be the additional income, we know that we have a system and a list that is prioritize that if that income comes in, we know exactly where we’re going to allocate that. And that is the power of automation. That is the power of having a system.

So one step further, what does this practically look like for us in terms of implementation? And I’m going to show much more of this during the webinar on the 8th, I’m really excited about that. So we use Ally for all of our online banking. Now, this is not a commercial for Ally. We really liked them. We’ve used them for several years. I like the capability they have with saving buckets and other features. But you can build a system like this, and many different types of savings accounts. So for us direct deposit from work income goes into Ally, goes into a checking account. And since we know the amount required per month to allocate to the goals we decided upon, there is then a bucket labeled for each of these goals inside of Ally. So the transfer of funds goes from checking account where the direct deposit comes in to savings account. And then within the savings account, we have a predefined bucket. So essentially what this looks like is you’ve got a certain amount of dollars, let’s say $30, or $40, or $50,000 in a savings account. But once you click into that, you see all these different sub-buckets for things like vacation, for a basement remodel. And again, you can do a multitude of different buckets, I think you can do up to 30 or so inside of Ally. In the case of for us, the IRA, the Roth IRA and HSA savings, you know, we could put those in the bucket as well inside the savings account, but we’re gonna set those up to be an auto contribution directly into the investment account, right? We want those dollars working for us as quickly as possible. So again, imagine that flow you get paid, right, we’ve identified the buckets that auto contribute into the buckets, because we know we’ve already accounted for it inside of the rest of the bucket and rest of the budget. And then that’s working for us once we have the system set up. Now depending on when you get paid for us, it’s the first of the month. But for you it might be two times a month. But regardless, once you know when you get paid and once that’s consistent, we know that anytime after the first so we get paid around the first of the month, as well as the 15th. But we use the first as our metric for when we’re going to auto fund these goals. So anytime after the first it could be the third, it could be the fourth, I think I have most of them set up on the fourth, we can have that auto transfer established to go from checking to savings to the bucket leaving only in checking what is left to pay off the credit card each month. And so that all other dollars, they have a purpose, right? They’re being defined and allocated towards a goal. That is the system of automation. And I’m gonna talk more about that in the webinar on the 8th.  I’m gonna give you some visuals and show you how to set up so you can make the most of it for your own financial plan. So that’s the fourth financial move. I think the one probably that can move the needle the most. Automate your financial plan have a system in place. 

And finally number five is set your learning plan. Now when it comes to personal finance, I believe strongly that there is no arrived with the financial plan. Right? This is constantly evolving. It’s constantly changing. And a commitment to ongoing learning and having the humility to understand that there’s much to learn, and that mistakes are inevitable, is really key to long term success. So next week episode of the podcast, I’m going to feature ten personal finance books that I think you can/should read in  2024 that have had a profound impact on my own journey. So make sure to tune into that episode. I don’t want to spoil the goods here. But it’s important that you define that learning plan and path that works best for you. 

One of the greatest advantages that we have of living in the 21st century is that we have access to learning just about anything that we want. And often we can do it at a low or no cost, right. Thank you very much to our local public library. So whether it’s reading books, great to have at it! If it’s podcasts, blogs, videos, there’s many options out there, find the learning path, that means the most to you and has the significance and really engages you in the learning process. And I would encourage you -learning is one thing, right? But learning plus action plus accountability is really where things start to happen. So that’s number five of our five financial moves to make it 2024. Set an intentional plan around what you want to learn in this new year. And then determine what are those resources, what are the blogs? What are the books? What are the podcasts that are going to help you get there and I hope YFP will be an important part of that journey.

Alright, before we wrap up today’s episode, I want to remind you of that free webinar I’m hosting on Monday January 8 at 8pm/Eastern: Master your Money.  This webinar, Master your Money in 2024 and a cover my playbook going from $200,000 in debt to becoming a seven figure pharmacist. Specifically I’m gonna cover how to get clear on your vision for living a rich life, to make sure we had that vision in place, the system and money management that I’ve used that we’ve used Jess and I, to get out of debt and save our first million. How to automate your plan. I’ll show you step by step process for automation. So you’re wondering if you’re on track to achieve your goals, and how to determine your retirement webinar. As I mentioned before, if you can’t make it live, no worries, we’ll send out a replay afterwards. But if you can make it live, we’d love to see you there and you’ll then be eligible for a chance to enter a giveaway. Two live attendees will be selected to either receive $100 Amazon gift card or a YFP bundle including a YFP t-shirt, YFP pullover and a YFP book of your choice. You can learn more at register at your yourfinancialpharmacist.com/2024. Again, that’s yourfinancialpharmacist.com/2024. Cheers to a great New Year. Have a great rest of your day. 

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As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. information to the podcast and corresponding material should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacists podcast. Have a great rest of your week.

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YFP 340: YFP Podcast Replay – How to Teach Your Kids About Money and Investing

Posted on by YFP Media

Dylin Redling and Allison Tom discuss their journey to FIRE and their book for kids on investing and personal finance, sharing practical advice and tips.

Episode Summary

On this episode Tim Ulbrich welcomes Dylin Redling and Allison Tom, creators of Retireby45.com and authors of two books, Start Your F.I.R.E. (Financial Independence Retire Early): A Modern Guide to Early Retirement and Investing for Kids: How to Save, Invest and Grow Money. Dylin and Allison achieved ‘financial independence retire early’ status in 2015 when they were in their early 40’s. Have you ever thought to yourself, I wish I had learned more about the topic of personal finance sooner? If so, that’s exactly what today’s show is all about as Tim interviews Dylin and Allison about their work with their book, Investing for Kids. They discuss practical advice and meaningful activities to help with teaching kids about money and investing.

About Today’s Guests

Dylin Redling and Allison Tom are a married couple living in Oakland, California. After working for 17 years in the tech industry in San Francisco, they left the workforce in January 2015 and never went back.

They own and operate the website RetireBy45.com, which provides inspiration, tips, and resources for achieving FIRE (Financial Independence / Retiring Early) and making the most of the FIRE lifestyle. In 2020, they wrote and published two books: “Start Your FIRE: A Modern Guide to Early Retirement” and the best-selling “Investing for Kids.”

They love food, fitness, and travel. Their goal of “60 by 60” is to visit 60 countries by the age of 60.

Key Points from the Episode

  • Learn about Dylin and Allison’s book for kids ages 8-12 called, “Investing for Kids: How to Save, Invest, and Grow Money”
  • Dylin and Allison’s first book was “Start Your FIRE: A Modern Guide to Early Retirement”
  • Their book for kids is easy to understand with lots of activities and lead by the colorful characters called the Dollar Duo: Mr. Finance and Investing Woman
  • Career paths and choices led Allison and Dylin to live in the Bay Area of California
  • When Dylin had pneumonia and was in the ICU for many days, the couple began to ask themselves, “Do we want to work for 25 more year?”
  • Dylin’s pneumonia experience along with changes in their careers led them to pursue with FIRE (Financial Independence, Retire Early) journey
  • Because they are passionate about learning about personal finance, they felt inspired to reach a younger audience
  • Dylin and Allison believe it is important to have a healthy respect for money, even in the age of digital currency
  • They hope their book can be read with an adult so that it can lead to good conversations about personal finance
  • Good finances early on can put you in a good position to be in control of future opportunities

Episode Highlights

“So there are plenty of ways to cut costs in your life that are relatively painless, that we’ve talked about all the time, so there are just different ways to do it to achieve FIRE. And some people don’t even choose to do the early retiring like my father is the example. So retirement is really more of the optional part. We’re not saying you have to retire, you have to leave your job and just sit around drinking mojitos all day long, although it’s certainly not a bad lifestyle. But you know, the retiring part is up to the individual. “ – Allison Tom

“So we love our FIRE lifestyle and the fact that we left our W2 jobs in our 40s, but we know it’s not for everybody. But what we do also know is that the concepts of Financial Independence are good for anybody, no matter when you might want to retire. And those concepts are really about doing the right thing with your money. So it starts with saving, it starts with being somewhat frugal — and when we say frugal, we don’t mean living a spartan lifestyle. We just mean not going crazy with money with spending on things that you don’t want or that you don’t need or you feel like you have to keep up with the Joneses and get a brand new SUV every two years.” – Dylin Redling

“I got to college, and then I had my first credit card that I just — oof. It was bad. I did not understand the concept of paying credit cards and interest rates and late fees and minimum payments. And so, you know, I got in trouble with credit cards after I graduated. And it wasn’t until after that that I thought, oh, I really need to learn more about what’s going on here. And so I started watching some shows on PBS, but by then, you know, I’m in my early 20s at that point. My learning took a lot longer for the habits to become engrained in me. So you know, I really do think that if kids could see this stuff earlier, it would be so much more impactful.” –Allison Tom

“That’s the beauty of the time being yours is you can make it whatever you want to do. We also do a lot more work with our community that we never had time to do when we were working. So we’re a lot more invested in our neighborhood, and we spend more time working with businesses in our neighborhood to bring in more business. So having that luxury of time means you can go explore whatever interests pop up.” – Allison Tom

“And so as the educators come up with their curriculum, I think honestly, a lot of adults are really intimidated by personal finance. And so it’s something that seems easy enough for them to cut out of the education system as an elective because well, if they don’t understand it, then kids aren’t going to understand it. And if they’re intimidated by it, then kids are definitely going to not understand it and be intimidated by it, so let’s not even talk about it, which actually is one of the reasons why we thought it was important to write the book.” – Allison Tom

Links Mentioned in Today’s Episode

Episode Transcript

(INTRO)

Tim Ulbrich: Dylin and Allison, welcome to the show. 

Allison Tom: Thanks for having us. 

Dylin Redling: Thank you very much. Great to be here. 

Tim Ulbrich: I’ve very much been looking forward to this interview to talk more about your story achieving financial independence and early retirement and more specifically, the work that the two of you did in writing “Investing for Kids: How to Save, Invest, and Grow Money.” And Dylin, let’s start with you only because we share an Ohio State connection since you’re an alum so go Bucks. Why write a book specifically designed for kids about investing? What was the motivation behind your work? 

Dylin Redling: Yeah, well, first of all, go Buckeyes. Yes, a great connection there. It’s interesting because I’ll start off with the interesting fact that Allison and I actually don’t have kids. And so you would think that the impetus would have been we had our own kids and we taught them financial literacy and it inspired us to teach more kids. But in fact, we sort of stumbled into this book. This is our second book. Our first book is called, “Start Your FIRE: A Modern Guide to Early Retirement.” And it’s all about early retirement and financial independence, which that book just poured right out of us because it’s something that we live and we know very well. And what happened was the publisher who we worked with on that book came back to us a couple months after that book was published and said, “Hey, we have an idea for this other book. And it’s investing for kids ages 8-12. And what do you guys think because you know about investing and financial concepts, and we think you guys might be able to pull this off.” And we thought, wow, we don’t have kids, we’re not teachers, we don’t hang out with kids. We have a few friends with kids, but we don’t spend a lot of time with them. And so we thought, man, this sounds really challenging and daunting. But it was during the 2020 year of COVID, so we had a lot of time on our hands. So we thought, let’s just go for it. And we dove into it, and it was very challenging because we wanted it to be interesting for kids and informative and fun but somehow, we put our heads together and we had a really good editing team that helped us with some of the concepts to relate to kids. And that’s — and we just dove into it and we just made it happen.

Tim Ulbrich: And I think you guys did an awesome job. You know, one of the things that stood out to me as my wife and I were looking through this book as parents of four young kids trying to teach this topic of money is that’s it’s very hands-on, it’s relatable, it’s digestible, lots of activities, really cool ideas. You know, I often find myself, especially writing, talking about this topic regularly, presenting on this topic, you take for granted how you learned some of this information along the way. You know, I often think, OK, take a concept like compound interest or, you know, mutual funds or index funds or ultimately trying to determine what your retirement savings goals, any of those concepts, and it’s very easy to get lost in the weeds. And I think it’s often hard to figure out, how am I going to break this down and teach this with my children and really work through this? And so I found myself looking through this, not only learning myself of oh, that’s a really neat way to teach a different concept or a very visual way or a nice activity to apply that information. So I think as I looked through this, whether someone is more advanced in their own knowledge and understanding of personal finance or whether they feel like they could also learn from these concepts, either one I think this book could be a really good guide for them alongside of working with their child. So great work in the work that you put together with the book. And Allison, knowing your background is a technical project manager, I’m curious, I mean, how and why did you catch FIRE — pun intended here — with this topic, not only as an individual pursuit for financial independence but also in wanting to help guide others to the work that you’re doing with RetireBy45.com and with the book “Investing for Kids.” Where does the interest come from? 

Allison Tom: Part of it is that my college degree is actually psychology and education. So I had all these grand ideas of becoming a teacher, an elementary school teacher, after I graduated from college. But you know, after a couple of years, it dawned on me that frankly, our teachers are woefully underpaid. And there was pretty much there was no clear financial path for me to continue being a teacher making the salary I was making, so I was living in Boston at the time and I moved back to New York where we eventually met waiting tables, of all things. And we came out to San Francisco on a whim, we were on vacation, we were in our mid-20s, we thought, alright, let’s check out San Francisco. And so I bounced around from career to career and ended up on a consulting company that eventually brought me into the technical world of the Bay Area. But you know, so being a project manager is basically being a glorified teacher. So it’s dropping people, wrangling people to do things that you want them to do but do it in a way that makes them want to be — work as a team and learn from each other. So in a way, it was being a project manager was — it had very similar tendencies as it was being a teacher. And so we had always thought, oh, it would be great to retire early, but we didn’t really know what retiring early meant. We thought, oh, 55, that seems like a really good age to retire. It’s earlier than 65, but it seems so far in the future. And living in the Bay Area, our expenses were so high that we were like, there’s no way, even if we’re making decent salaries between the two of us that we’re ever going to retire. But about 11 years or so ago, Dylin came down with double pneumonia and was in the ICU for about 10 days and in the hospital altogether for almost two weeks. And that for us was a light bulb moment because he was within a 50/50 chance that he would make it. And so you know, after that, we kind of thought, OK, do we really want to keep working for the next 25 years or so? And so we kind of like made it our goal to get out of the rat race as soon as we could. And so we kind of fell into by accident. We can talk about that later, but it just — it kind of was a natural progression from all of the things that we’ve been doing over time.

Tim Ulbrich: Yeah, that makes sense. And I appreciate you sharing some of the background and story. We’ll come back to how you got to that point of early retirement, obviously as I mentioned in the introduction, early 40s to be able to accomplish that goal, and we’ll talk a little bit about how you got to that path, why that was possible as well. And so let’s first dig into some of the book of “Investing for Kids.” Let’s start with the main characters of the book, the Dollar Duo: Mr. Finance and Investing Woman. Allison, tell us more about these two characters, how you came up with the idea, why it was important to the overall text, and how those characters can really help the learner, again, 8- to 12-year-old is the target group here, engage with the material throughout the book. 

Allison Tom: Well, first of all, it was kind of funny, today is actually Superheroes Day, so –

Tim Ulbrich: There we go.

Allison Tom: It’s a perfect segue into the topic. We were actually taking a walk one day as we were writing the book, and we were talking about politics, of all things. And we were trying to figure out in the administration, whichever administration, whoever won the presidency, what each president could do to make their administration better. And so we kind of were talking and talking about of all things, the Justice League of America and who we would think would be a good fit for making this country a better country. And so the whole idea of the Justice League, kind of thought, we thought, oh, superheroes. Kids love superheroes. Let’s talk to our publisher about bringing in some superheroes. And we were like, well, I don’t know if they’ll go for that, there’s some extra graphics involved and it could be expensive, but we felt that it would really be a good way for kids to relate to finances. And so we kind of pushed hard for this idea of having superheroes teach kids finance. 

Tim Ulbrich: Yeah, and that stood out to me in addition to how visual it is. This does not — especially for a topic like investing, right, can be weighty at times, it can be overwhelming, I often find myself when I’m giving a talk on this topic, starts with excitement often when we think about what the — and then you get into the weeds and you see the eyes gloss over, right, and other things. And this does not read like a textbook in any way, shape, or form. And I’m grateful for that. So thank you for the illustrations, the activities, the superheroes, but I think it very much reads like an interactive, applicable, nuts-and-bolts, important information, but how do I actually apply it and hopefully get excited about this information. Again, we’re thinking about an 8- to 12-year-old of wanting to really hopefully empower them to be excited with this for the rest of their own financial journey. And I very much read this book, as I mentioned, being a father of four boys who also lives and breathes personal finance, I really do often find myself in conversation with my boys about money. And honestly, I struggle at times with making the topic of money tangible and meaningful. And it can feel abstract, especially when I find myself trying to say and teach a principle that I very much understand but it feels more abstract as I talk it out loud and especially when you start to view it through the lens of a child. And so I like how you start the book with Chapter 1 on Money 101. You cover important topics like money doesn’t grow on trees, ways to earn money, a little bit of entrepreneurship in there, which is really cool, the history of money, where to keep money. And so Dylin, here’s the challenge that I’m seeing with my boys. In the age of credit cards, debit cards, direct deposit, online banking, digital currency, electronic payment methods, it can feel difficult to teach a child about money when you don’t see it. Right? There’s very little actual, physical cash and therefore, it can be hard to connect work and I think the opportunities from work with earning money and therefore, the opportunity to then save and see it grow. So what are some tips and strategies as you put this book together as well as the other teaching you’ve done on this topic about how can we teach kids about money in a way that it can be relatable, it can be tangible, and then hopefully it becomes memorable for them. 

Dylin Redling: Yeah, you know, that’s a really good point about money being very digital in this day and age. I remember when I was a kid, one of the coolest things was my grandmother would give me and my cousins 50 single dollars for Christmas and for our birthdays. They would come in a little box just big enough to hold those 50 $1 bills. 

Tim Ulbrich: I love that.

Dylin Redling: And — yeah, it was really cool. And you know, $50 back then for a kid was a lot of money. And those 50 $1 bills would last a really long time. I would take them into the arcade, into the pizza parlor, whatever. And so maybe one way to do it is to actually bring back physical money. And I don’t think the amount really matters that much. But like you said, I mean, being able to tangibly feel it, see it, and understand it, it helps a lot more if you’re using physical money. And I’ll actually give an example of that we used on our blog and in actually “Start Your FIRE” book. I don’t think we mentioned it in “Investing for Kids,” but it’s a little story I like to tell about a money lesson that I actually learned from Allison when we were waiting tables in New York. So we met in a big restaurant in Times Square, and Allison grew up with a little bit of a better financial education in her household than I did. My single mother was wonderful, but it was all paycheck-to-paycheck, there wasn’t a lot of saving or investing. So I came into our initial relationship not very good at dealing with money. So anyway, we were waiting tables. So all of our money pretty much was in tips. So we would have tons of cash. And I remember just putting the money — I would wad it up into balls, I would stuff it into all four of my pockets because I was busy. And then we would go out afterwards and Allison saw how I was treating my money, and she was like, “What are you doing? How do you even keep track of that? That’s awful.” And so she taught me this little lesson. And she doesn’t even remember this because this was 25 years ago, but it stuck out in my head. And basically, I call it the Wallet Lesson. When you take all of your bills and you put them nicely, neatly in order from small to big or big to small, whatever works, fold it neatly into your wallet. And it’s really simple, but the reason it was impactful for me is because it just got me to think about how to respect and treat money. You know, you work really hard for money –

Tim Ulbrich: That’s right. 

Dylin Redling: And if you don’t treat it well, you don’t respect it, you know, that $50 might not seem like a big deal. But when it gets to $100,000 or $500,000 and you don’t have that same respect and feel for what that money represents and how hard it was to earn it, you’re not going to put it and treat it and save it and protect it as well as you could. 

Tim Ulbrich: Such a good example of a behavioral move, right? The number of dollars didn’t change, but how you treated them, how you respected them, how you viewed them, and I think many of our listeners, we talk on this show often that I believe personal finance, it’s about the math and it’s about the behavior, and both of those are very important and some of those types of moves or here, teaching kids in that way, I think can be very powerful as well. Allison, Chapter 2, save your money, you have an activity titled “Be an Interest Rate Detective.” I love this. I thought this was a really cool interactive activity where you challenge the reader to work with an adult to research interest rates for a local bank savings account, a CD, so a Certificate of Deposit, and an online savings account. So again, this was just one of many example activities you have throughout the book, but why is an activity like this so important in terms of someone being an interest rate detective to experience and go through as they begin their journey of understanding some of the basics of investing? 

Allison Tom: So part of it is we wanted all the activities to be something that kids could do with the adult in their life. And we didn’t assume that every child has a parent because we know in this modern day and age that families are different nowadays, and you might have two moms or two dads or a grandmother or grandfather or a guardian of some sort. So we wanted something that people could do together with — kids could do together with someone else. And we thought, oh, it’s going to be interesting because banks are closed during COVID. When we were writing the book, it was right in the heart of shelter in place. But we thought, well, you know, kids have access to — most kids have access to a computer, they can at least walk around to a local bank and banks always have their advertisements on their windows with their interest rates. But we thought it would be an interesting way for kids to see what is in their environment and practice some good behaviors like oh, what does interest rate mean? What is APR? Those are, they’re jumbled letters and so you actually learn what the acronym stands for. And so we want to make sure that kids could kind of connect their physical world to their these abstract ideas about money. So all these activities are kind of a way to get kids to start thinking about it, and we were like, oh, kids aren’t really going to want to do activities, it’s extra homework. So we tried to make them fun and things that they could actually do and feel like they were learning something. 

Tim Ulbrich: And I think this was a good example where the activity really, to me, is a rabbit hole of other learning, right? So if you go to the bank and do this activity, just like you suggested, Allison, it leads to other conversations and questions like, what is the federal reserve? And what is an insured account? What does that mean? You talk about that in the book, you know, how do you explain the federal reserve? What is compound interest? Why is that so important? What is principle? What’s interest? What do terms mean? And I think it, again, leads to further conversations, which obviously hopefully spark some motivation and curiosity to learn more on this topic. Dylin, in Chapter 3, Introduction to Investing, you cover very important topics, you know, why to invest, risk v. reward — and I love the Risk-o-meter throughout the book, that was really neat — liquidity, the importance of conducting research, and connecting back to my previous comment about the difficulties teaching a child about money when it may not be tangible, you can’t see it, can’t feel it type of a mindset, I think this is another area where parents may feel challenged to teach a child the importance of investing when again, it might feel somewhat abstract and here, we’re talking about delayed gratification, right? So not spending money on something today that has an instant reward. I think back to my childhood, it was driving to the corner store, buying baseball cards, buying candy, you earn the money, you spent the money, you saw the reward instantly. So here, the activity on investing, which I thought helped to really drive this concept further, you talk about an activity of picking a stock and really going through that process of understanding what’s involved there. So talk us through that type of an activity, what’s involved in that, and why that’s important to help a child relate to the concepts of investing.

Dylin Redling: Yeah, sure. It’s interesting because I can also relate it to how Allison and I do our own investing. And most of what we do, to be honest, are buying mutual funds and index funds. We don’t do a lot of single stock buying. However, there are some advantages to just helping a child or anybody, really, think about, well, if you were to buy a single stock, what would the thought process be when you do that? We actually just wrote an interesting post on our blog just about a week ago where we had $10,000 that we wanted to experiment with. And what we did is we selected five different stocks to invest that $10,000. So $2,000 per stock. And I went through the process in that blog post of why we would do this. And it wasn’t to get rich quick or to see what would happen in a week or a month. This particular blog post talked about a one-year time frame. And it’s the same with the activity for the child. I think we used a shorter — a relatively short time frame so they could at least measure their success. At the end of the day, investing, as you know, as your listeners know, it’s very much a long-term process where you’re investing over years and decades. But again, to get the child to think about some of the things that you might want to think about with whether you’re investing in stocks or any sort of investment, what are the things that go into that thought process? And so getting back to that blog post I wrote, some of the stocks that I suggested that we test out, one was a blockchain ETF. So now that bitcoin and other coin-based just went public, those are things that we wouldn’t necessarily invest in directly. But a blockchain ETF is an example of a way you could dip your toe into that technology. So that was the thought process there. Another example was a cruise company, NCL, Norwegian Cruise Line. Now that COVID is starting to disappear and everyone’s getting vaccinated, people, there’s this pent-up demand to start traveling again. So we thought, hey, in the next year, NCL may actually start to do really good. And they even have a program where if you have 100 shares, you get extra bonus points. And so the idea is to think about all the different aspects to that investment, like how does it relate to what’s going on in the world right now? And what other pros and cons are there to that investment? 

Tim Ulbrich: Yeah, and I think we share your philosophy. What I heard there is our planning team often says a good investing plan should probably be as about boring as watching paint dry. 

Dylin Redling: Right. 

Tim Ulbrich: At the end of the day, it’s about a long-term play. But I like this activity as a concept. You know, I remember I had a great Econ101 teacher that had us do a similar activity. And it’s very memorable because it also leads to many other conversations like well, what type of influence does my marketing have? Or I thought this was going to go this way, and it didn’t go this way. Maybe I had some overconfidence in my selection of things. So why is diversification important? So I think, again, reading it and doing it, two very, very different things. And I think people experiencing this firsthand, especially you think of an 8- to 12-year-old, a very kinesthetic learner, right, hands-on experience that moment, be able to learn through that experience. Allison, as I went through the book, many times I thought to myself, man, what if I would have had some of this information earlier? What if I would have had this in middle school or high school or perhaps even earlier? And shoutout to my parents, who did an awesome job of the foundations, grew up in a small business, felt like I had a little bit of a head start. But outside of some K-12 programs and in higher education, I would say it’s largely absent, maybe some elective courses or some opportunities. And so I can’t help but think like, why aren’t we doing more of this? Why aren’t we covering more of this in a K-12 education? I mean, this type of book, this type of experience, these types of activities would be a home run in teaching kids about money. Here, we’re taking 8-12 investing, but obviously we all know it’s broader than that as well. So question here, I’m not asking you to solve the personal finance educational system woes, but why do you think this is not more foundational to our educational system in terms of personal finance education? 

Allison Tom: Right. So I think part of it is that our generation didn’t really learn this either. And so as the educators come up with their curriculum, I think honestly, a lot of adults are really intimidated by personal finance. And so it’s something that seems easy enough for them to cut out of the education system as an elective because well, if they don’t understand it, then kids aren’t going to understand it. And if they’re intimidated by it, then kids are definitely going to not understand it and be intimidated by it, so let’s not even talk about it, which actually is one of the reasons why we thought it was important to write the book. We didn’t get this education when we were growing up. I know my parents are second-generation immigrants. And so the money lessons that they learned were from their parents, who grew up during the Great Depression. And as immigrants coming over to this country, they just pooled their money and they saved and they saved and they worked 20 hours a day to make money and then they would maybe invest it in the bank, although plenty of my relatives didn’t even bother with that. So my lessons growing up were save and save and save and save. I had a little piggy bank, and I would put all my coins in from the piggy bank, but that was the only thing that I learned. And so it wasn’t until I got to college, and then I had my first credit card that I just — oof. It was bad. I did not understand the concept of paying credit cards and interest rates and late fees and minimum payments. And so, you know, I got in trouble with credit cards after I graduated. And it wasn’t until after that that I thought, oh, I really need to learn more about what’s going on here. And so I started watching some shows on PBS, but by then, you know, I’m in my early 20s at that point. My learning took a lot longer for the habits to become engrained in me. So you know, I really do think that if kids could see this stuff earlier, it would be so much more impactful. You know, I’ve talked to a girlfriend of mine, her daughter is 17 and she read the book and she was like, “Yeah, you know, I’m going to start doing the savings plan when I get a job.” My friend was laughing because she’s like, my daughter doesn’t have a job. But she was just like, she got inspired by it, and I thought, oh, if we could just get kids to learn this stuff sooner –

Tim Ulbrich: Yeah. 

Allison Tom: All the great things we could do with them. So hopefully. Hopefully.

Tim Ulbrich: Yeah, and I love that, to that point, Allison. I think it was early in the book, you have the reader go through an activity where they identify problems, things that could be improved upon, right? And one of the things I often say is that any business is a solution to a problem, and that solution is one that people care about and are willing to pay for. And you know, I love that because I think for a child, like if they can think about, what are some things that could be done better? You know, one of them you proposed in the book, which was really cool because we recently just bought this — or actually we got it as a gift for our kids from our family — is you mention like chess. Really hard game for kids to play, kids to learn. Why isn’t there a solution out there that can make chess easier to play? Sure enough, there is. There’s a card game where you draw cards, you learn the basic moves of chess. So things like that, I think you’re inspiring some of the creative thinking, the problem solving, and laying some of the seeds of entrepreneurship or even for those that don’t own their own company, which would be the vast majority of folks, intrepreneurship, how can you be a problem solver within your organization? And how can you create solutions that make you a valuable asset within that organization? I want to shift gears a bit to connect some of the work that you have in “Investing for Kids” with what you cover in your site, Retireby45.com. You mentioned your other FIRE book as well. And I got the impression that you both, you believe that everyone could put together — especially an 8- to 12-year-old reading the “Investing for Kids” book — put together a plan for FIRE, again Financial Independence Retire Early — by the age of 45. So Dylin, our listeners know firsthand that time in the market equals success, and that compound interest, as you mentioned in the book, is the eighth wonder of the world. So we know the math is possible if someone starts at an early age. But why do you think it’s important that someone plans for FIRE by the age of 45? 

Dylin Redling: Whether you’re able to retire in your 40s or your 50s or you do a traditional retirement in your 60s or even beyond, Allison’s dad, for example, is 70 now — or slightly older — and has no intentions of stopping working even though Allison suggests that he stop and enjoy life. But he’s got a job that he really loves. And so there’s a lot of people out there that are like that. So we love our FIRE lifestyle and the fact that we left our W2 jobs in our 40s, but we know it’s not for everybody. But what we do also know is that the concepts of Financial Independence are good for anybody, no matter when you might want to retire. And those concepts are really about doing the right thing with your money. So it starts with saving, it starts with being somewhat frugal — and when we say frugal, we don’t mean living a spartan lifestyle. We just mean not going crazy with money with spending on things that you don’t want or that you don’t need or you feel like you have to keep up with the Joneses and get a brand new SUV every two years. So there’s that, and of course investing wisely. And you know, we have another story that we write out on our blog, which kind of I think can be somewhat inspiring to people who are in their 20s and maybe haven’t really done anything with their finances yet. We, as Allison alluded to earlier, kind of our story is we met in New York and then we moved to San Francisco. And we were in our mid-20s at the time. And we still hadn’t invested a dollar yet. And it wasn’t until our late 20s that we got “real jobs” with a 401k plan and that sort of thing. And so it wasn’t until our late 20s that we really started investing. And our entire investment life cycle, if you will, was about 17 years from our late 20s to our early 40s. And in that time, we just were so diligent about dollar cost averaging, we did — we invested into both our 401k, our IRA, and a taxable account once we got some extra income literally on a weekly basis for years and years and years, no matter what the market was doing. Through the 2001 .com crash because we’re both working in that industry and of course through the ‘08-’09 recession. Never stopped. And so those kind of habits, again, are good for anybody no matter what your retirement goals are, just really those financial habits are going to put you in a great position. 

Tim Ulbrich: Yeah, and I’m glad you shared that, Dylin. One of the questions I had for you was I read your story of not really late 20s, early 30s getting serious about investing, but retired or achieving FIRE by 43, 44, so short window of time, right? We tend to think of a very long trajectory of savings. You mentioned 17 years. So my question was what was the secret sauce? And if I heard you correctly, it was tax-advantaged accounts, 401k’s, IRAs, some taxable accounts and dollar cost averaging and being consistent. Is that fair? 

Dylin Redling: Yeah. You know, a couple other things we did — we did the phrase “side hustle” is really popular now. But when we did it, we just called it a side business. This was in the mid-2000s. I came up with an affiliate marketing business that I ran on the weekends. And it ended up being a third income for us. So there’s things like maximizing your income. And then another concept — I’ll shoot it over to Allison to talk about — is geographic arbitrage. And that helped us kind of move about nine years ahead of schedule. Do you want to talk about how we did that? 

Allison Tom: Sure. So geographic arbitrage has a lot of different meanings in the — for people. And the gist of it is that you leverage your current salary and move to a lower cost location. And so most people think that is oh, I’m going to make my United States salary and move to Thailand or Costa Rica, where the cost of living is exceedingly low. We did it by moving from San Francisco to Oakland, California, which geographically is a 10-mile difference but at the time, we were able to save about 50% on our housing costs. 

Tim Ulbrich: Wow.

Allison Tom: So yeah, it was pretty insane. For being 10 miles away, two or three train stops away on our BART system, we were able to pay off our condo in Oakland in cash by selling our place in San Francisco, which alleviated all the mortgage payments, the increase in property payments and our insurance went down as well. So that, Dylin calculated later, saved us probably about nine years of working because our mortgage in San Francisco was so astronomical that just cutting 50% off just pushed us into the financial independence sphere that much sooner. So it’s things like that. Obviously not everybody is going to be able to save 50% of their housing by moving 10 miles away, but there are other ways to do it. You can do things like house hacking where if you have space on your property, you could build an extra unit and rent it out or if you have an extra bedroom, you could rent it out and have a roommate or Airbnb it. So there are ways tod do it without going through the extreme example that we had. So there are plenty of ways to cut costs in your life that are relatively painless, that we’ve talked about all the time, so there are just different ways to do it to achieve FIRE. And some people don’t even choose to do the early retiring like my father is the example. So retirement is really more of the optional part. We’re not saying you have to retire, you have to leave your job and just sit around drinking mojitos all day long, although it’s certainly not a bad lifestyle. But you know, the retiring part is up to the individual. 

Tim Ulbrich: Yeah, I’m glad you said that, Allison, because I know many of our listeners love what they’re doing as pharmacists and they worked hard, and they got a doctorate degree and they have student loan debt and they invested in that education. And so my read is that many pharmacists are captivated by the idea and the power of financial independence. And you know, I believe that’s a goal we all should strive for for a variety of reasons with RE, Retire Early, being one of those perhaps reasons, but other things as well in terms of why that financial independence may be important. So nine years, nine years was estimated from that one decision, which I’m coming full-circle, Allison, about what you shared at the beginning of Dylin being in the hospital with double pneumonia. And when you start to think about the value of time, I mean, nine years and doing some of those calculations and what does that mean for one’s personal situation, I think that’s a really powerful example of taking something that can be mathematical or objective and looking at it in a different mindset. If we were to make this move or this move, what does that mean for us in terms of timeline to retirement, working part-time, pursuing another opportunity, what does that mean for one’s goals towards financial independence? I’m glad you discussed geographic arbitrage because one of the things we see in our profession in pharmacy is that unfortunately, a pharmacist’s income usually does not translate with cost of living. So here I am in the Midwest and that income for a pharmacist in the Bay Area might be a little bit more for a similar role but nowhere near the cost of living difference between Columbus, Ohio and San Francisco, California. So I think this is a move, especially for many of our listeners that might be saying, you know, ‘I’m making a decent income, but I’ve got a lot of work to do on student loans, I want to invest, I want to buy a home, I want to do this or that. And at the end of the day, there’s only so much income.’ So is a move, whether it’s near, within 10 miles, or something a little bit more significant, is that an option that somebody may be able to pursue? Allison, what have you guys been doing since achieving FIRE? You know, what’s been the goals, what’s been the priority, how have you been spending time? I think that’s one of the other common objections that comes up is like, if I retire at 45, like I don’t even know what I would do with my time. Tell us a little bit about that journey since you guys have achieve FIRE. 

Allison Tom: So it’s funny, we — so we FIREd quite by accident. We were both working in tech startups, and Dylin got laid off and then I got laid off about five weeks afterwards. And so we kind of took the time after we were both laid off to travel a little bit. That was one of the things that two people who are working can’t always schedule, coordinate their schedules, to take some time off. And so we thought, alright, this is the perfect time. We went to Europe for two weeks and did a cruise around the Mediterranean and had a blast and then came back and thought, alright, we’ve got to get back to work. So we went about — we went on interviews and we just saw just how miserable people were at their jobs. Just so stressed out, and I interviewed with this one guy who was like, “You need to tell me who said this about us so I can go talk to them.” I’m like, I don’t want to work for you. You’re scary. And so you know, the three months turned into six months and then nine months and then Dylin figured out kind of like back of the envelope math, figured out that we could actually retire without having to go back to work anymore. He stumbled into the 4% Rule, which we still hadn’t at that point heard the term FIRE before. You know, the first few years we did a fair amount of traveling domestically. Like we would go back to visit his mother and my father, who both live on the East Coast, which is one of the things you just don’t get time to do when you’re working is spending time with family. And so you know, if we would go back East, we would maybe spend two days with each parent because they don’t live that close to each other. And now, we can actually go and spend a week with each parental unit. And that makes a big difference because, you know, they’re getting older and living across the country, it’s harder to connect with them. So we do a lot more slow travel where we don’t have to feel rushed between people. And then it’s funny because we — our retirement has changed as time goes by. So for people who are concerned that oh, what am I going to do with my time? Your time is yours. You can now make your own schedule. And that, to me, is the beauty of not just financial independence, it’s financial freedom because you can choose what you want to do. And so you know, the first two years were traveling domestically, the second two years were more about traveling internationally. And we had two cats that passed away at 19. So for us, they were like our kids. And so we did not do a lot of traveling away from them until they passed on. And so once they did, we’re like, alright, we’re going to go crazy and go travel around the globe. And so the last — and then the last two years have been focused on writing books and going to financial conferences and kind of learning from others and then applying that and communicating out to audiences like yours. That’s the beauty of the time being yours is you can make it whatever you want to do. We also do a lot more work with our community that we never had time to do when we were working. So we’re a lot more invested in our neighborhood, and we spend more time working with businesses in our neighborhood to bring in more business. So having that luxury of time means you can go explore whatever interests pop up. So you know, did we ever think that we would be working with small businesses two years ago? Probably not. But now we are, and we’re advocates for small businesses in our neighborhood, and that’s something we would never have thought we would have done when we first retired.

Tim Ulbrich: That’s very cool. And I read as well your goal of 60 by 60. Sixty countries to visit by the age of 60. If I understand it, you’re about halfway through. Looking forward to following your journey. I’m hopeful you’ll be blogging about it along the way as well. Dylin, I’m going to throw the last question I have over for you. And one of the things I think about when it comes to early retirement and achieving financial independence or the FIRE movement is that it really does require delayed gratification and at times, you mentioned the word frugality earlier. And that frugality can be at various levels. As you mentioned, we’re not necessarily talking spartan type of frugality. My question here though is how do we strike the balance? You know, whether it’s for ourselves or teaching our kids about saving and investing to take care of our future selves but also valuing and making sure we understand that it’s important that we enjoy some of the money along the way as well. I find myself often struggling with this individually of, OK, I know I need to take care of my future self and probably sometimes I do that at the expense of the experiences and the enjoyment today. And I think striking this balance is really important. What are your thoughts on that? 

Dylin Redling: You know, I’ll actually plug a couple of other books besides ours that I really like. One is “A Simple Path to Wealth” by Janelle Collins, which I highly recommend. And another one is actually one of Allison’s favorites. It has a funny title, it’s “I Will Teach You to Be Rich” by —

Allison Tom: Ramit Sethi.

Dylin Redling: Ramit Sethi. And we saw him speak. He was a keynote speaker at FinCon a couple years ago. And one of the things that he said, which really resonated with me and it goes to your question, is spend liberally on things that you enjoy. But hold back aggressively on things that are not important to you. And it’s a very simple concept. But again, it goes directly to your question, and it’s really — maybe you or your kids or whoever’s thinking about this makes a list. Here are the things I’m passionate about. Here are the things that I really enjoy. I love travel, I like eating out at restaurants, I like entertainment, sports, whatever it is. And I’m going to set my budget to focus on those things. I’m going to be OK — maybe I’ll go to a World Series game because I’m a huge baseball fan. Or I’m going to set a goal to go to every baseball park in America. You know, whatever that goal might be. Conversely, think about the things that aren’t that important to you like maybe a brand new car is not important to you, so you drive your car for 10-20 years and you really just never focus on spending a lot of money on that. And so those are the concepts that I think are something to really think about. And for us, that’s what we’ve always done. When people look at our lifestyle from the outside or even some of our friends, you know, they may think, wow, we’ve always lived in pretty expensive apartments — or condos or houses, so they might think, wow, they spend a lot of money. But if you look a little deeper, like we had a car for almost 20 years. We had a Volkswagen Jetta. We just recently got a new-to-us couple years old Toyota Corolla. So there’s an example where we just — you know, having a brand new car wasn’t that important to us. But again, we have the 60 by 60 goal. So travel is really important to us. And we have no problem spending that extra money to go travel for a few months and really try to see the world because that’s something that we’re passionate about. That being said, when we do travel, we try to — we don’t stay at four-star hotels because part of our kind of nature is to also find some deals here and there and to just spend consciously, to just spend our money kind of wisely. 

Allison Tom: We prefer to spend money on the experiences rather than the hotel room that we’re putting our suitcase in. 

Tim Ulbrich: Yeah. And I was at that keynote that you were at, and with Ramit, and I’ll never forget it. I mean, the concept that he talks about in “I Will Teach You to Be Rich,” money dials, right, is find the things that are of value to you and dial it up. And find the things that are not and dial them down. And you know, I remember hearing that, and I was like, heck yeah. It just makes so much sense. And you know, to the comment of experiences and even the literature really showing happiness related to money, it’s experience and giving typically are the areas where we see that biggest connection. So Allison and Dylin, I really appreciate you guys taking time to come on the show. Kudos on the work here with “Investing for Kids,” I really enjoyed it, as well as the work that you’re doing at Retireby45.com and your other book, “Start Your FIRE: A Modern Guide to Early Retirement.” As it relates to the book “Investing for Kids,” I hope our audience will pick up a copy of this, available at Amazon, Barnes & Noble, many other online vendors as well. I really did find it engaging, it was rich with relevant information, practical exercises to apply the information, as I mentioned, certainly does not look, feel, or read like a textbook. And so I think many in our community are going to find it helpful. What’s the best place for our audience to go to follow the work that the two of you are doing? 

Dylin Redling: Well, our — I’ll plug our website, and I’ll have Allison plug our Instagram account. Retireby45.com is our website, and we blog there on a once or twice a month with a fresh new blog post, and we have a bunch of stuff on there, courses and other things. And then Allison’s been working on really putting together a pretty cool Instagram account.

Allison Tom: So we have Instagram and Twitter both @retire_by_45. Yeah, it’s been an interesting challenge trying to get into the social media, the social media space.

Tim Ulbrich: Very good. We will link to both of those in the show notes as well as the Retireby45.com as well as the books that we’ve mentioned, not only your books but the others that you referenced as well. So the two of you, thank you again very much for your time. I really appreciate it.

Allison Tom: Thanks, Tim. It’s great.

Dylin Redling: Thanks. 

Allison Tom: O-H

Dylin Redling: I-O

Tim Ulbrich: I-O!

Dylin Redling: Thanks, Tim. Great talking to you.

Tim Ulbrich: As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published.  Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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YFP 339: YFP Podcast Replay – Why Negotiation is an Important Part of Your Financial Plan

Posted on by YFP Media

Tim Ulbrich & Tim Baker talk about negotiation, why it’s an important part of the financial plan, the goals of negotiation, and tips for conducting an effective negotiation.

Episode Summary

Tim Baker joins Tim Ulbrich on this episode to dig into all things negotiation. Negotiation is the process of discovery and a way to advocate for yourself and what your needs are. Tim Baker explains that negotiation is an important part of your financial plan for many reasons. He explains that settling for a lower salary can have a significant impact on your present and future finances because you may accrue less in retirement savings and potentially other investments. However, negotiation doesn’t just lie in your salary. You can also negotiate benefits like flex scheduling, paid time off as well as potentially parental leave and professional development opportunities, among others. 

Tim Baker shares that 99% of hiring managers are expecting new hires to negotiate and build their initial offer as such. Many don’t end up negotiating because they don’t want to risk the offer being revoked, but Tim says that the majority of the time you should present a counter offer.  

Tim then digs into the stages of the negotiation process that include the interview, receiving an offer, presenting a counter offer and accepting the offer and position. He shares many strategies and tips for each stage as well as additional techniques to use throughout the process.

About Today’s Guest

Tim Baker is the Co-Founder and Director of Financial Planning at Your Financial Pharmacist. Founded in 2015, YFP is a fee-only financial planning firm and connects with the YFP community of 12,000+ pharmacy professionals via the Your Financial Pharmacist Podcast podcast, blog, website resources and speaking engagements. 

Tim attended the United States Military Academy majoring in International Relations and branching Armor. After his military career, he worked as a logistician with a major retailer and a construction company. After much deliberation, Tim decided to make a pivot in his career and joined a small independent financial planning firm in 2012. In 2016, he launched his own financial planning firm Script Financial and in 2019 merged with Your Financial Pharmacist. Tim now lives in Columbus, Ohio with his wife (Shay), two kids (Olivia and Liam), and dog (Benji).

Key Points from the Episode

  • Negotiation can be a key part of the financial plan
  • Income is the lifeblood of the financial plan. 
  • Learn ways to grow and protect income. 
  • Advocating for yourself is important, and it’s not always just about salary.
  • A lower salary can have long term consequence down the road. 
  • Employers expect some negotiations with candidates. 
  • Salary alone should not be looked at in a vacuum; many factors can contribute a more desirable work positon.
  • A lot of time and effort goes into finding the right position for a job, so when an offer is made it is likely not going to be derailed by candidate asking for a higher salary.
  • A good candidate asks questions and listens well. 
  • Make sure you get offers in writing. 
  • Never lie in an interview about current salary range.
  • Using a precise number versus a rounded number in a counter offer has more success.
  • Using the anchoring technique to provide a salary range can help you land the salary you ultimately desire.
  • Asking a calibrated question is a question with really no fixed answer that gives the illusion of control.
  • Using “how”, “when”, “why” calibrated questions can be helpful in showing what you’re really trying to achieve without causing emotions to rise.
  • Mirroring technique is repeating 1-3 words back to the employer to show you are listening well and in turn, making them feel respected and understood.
  • Labeling and validating emotions technique allow you to hear what is going on in an organization while remaining neutral.
  • The accusation audit is a technique that’s used to identify and label probably the worst thing that your counterpart could say about it.

Episode Highlights

“Yeah, so negotiation, you know, it’s really a process of discovery. It really shouldn’t be viewed as a battle. It’s really a process of discovery. It’s kind of that awkward conversation that you should be obligated to have because you know, if you don’t want to advocate for yourself professionally, who will?” – Tim Baker 

“And I believe this first stat comes from SHRM, which is the Society for Human Resource Management. So I think this is like the biggest association for like HR and Human Resource personnel in the country. And the stat that I use is that 99% of hiring managers expect prospective hires to negotiate. So if you think about that, you know, the overwhelming majority expect you the prospective hire to negotiate. And they build their initial offers as such.” – Tim Baker

“So typically most jobs, there’s — obviously there’s an application process, there’s interviews, there’s second interviews, there’s maybe on-site visits, there’s kind of looking at all the candidates and then extending offers. If you get to that offer stage, you’re pretty — they’ve identified as you’re the person that they want. So sometimes a little bit of back-and-forth is not going to derail any such deal. So it’s really, really important to understand that.” -Tim Baker

“So when you get that interview, what I say is typically you want to talk less, listen more and learn more. Typically, the person that is talking the most is not in control of the conversation. The one that’s listening and asking good questions is in control.” -Tim Ulbrich

Links Mentioned in Today’s Episode

Episode Transcript

(INTRO)

Tim Ulbrich: Tim Baker, welcome back to the show. 

Tim Baker: Yeah, happy to be here. How’s it going, Tim?

Tim Ulbrich: It’s going. Excited to talk negotiation, something we discuss a lot in presentations, a lot I know that you discuss with clients as a part of the financial plan, but we haven’t addressed it directly on the show before. So I’m excited that we get a chance to dig into this topic. And we know that negotiation can carry a lot of power and can be used across the board really in life, right? It could be negotiating terms for a new or existing job position, buying a car, buying a house, negotiating with your kids or spouse — kidding, not kidding as we’ll talk about here in a little bit. So we’re going to focus predominantly on salary negotiation, but really these techniques can be applied to many areas of the financial plan and really life as a whole. So Tim, I know that for you, negotiation is a key piece of the financial plan. And you and our CFPs over at YFP talk about negotiation in the context of financial planning, which I would say is probably not the norm of the financial planning industry and services. So let’s start with this: Why is negotiation such an important piece of the financial plan?

Tim Baker: Yeah, so I think if we look at YFP’s mission, YFP’s mission is to empower pharmacists to achieve financial freedom. So I think the building blocks of that really is kind of what we do day-in and day-out with clients at YFP Planning. And what I typically, or the way that we typically approach a financial plan is we really want to help the client grow and protect their income, which is the lifeblood of the financial plan. Without income, nothing moves. But we know that probably more importantly than that is grow and protect the balance sheet, the net worth, which means increasing assets efficiently and decreasing liabilities efficiently and ultimately moving the net worth number in the right direction. So those are both quantitative things. But then qualitatively, we want to make sure that we’re keeping all the goals in mind, so grow and protect income and net worth while keep the goals in mind. So to me, that’s our jam, you know? So when I say — when somebody asks me a question like we do the Ask a YFP CFP, and I always say, “Well, it depends.” A lot of it really depends on those foundational, like where are we at with the balance sheet and where do we want to go? Meaning what are our goals? What’s our why? What’s the life plan, what’s a wealthy life for you and how can we support that with the financial plan? So to go back to your question, my belief is that the income is a big part of that. 

Tim Ulbrich: Yes.

Tim Baker: And what I’ve found working with many, many pharmacists is sometimes pharmacists are not great at advocating for themselves. You know, most of the people that I talk to when we talk about salary negotiation, they’re like, eh, I’m just thankful I have a job, and I’m in agreement with that. But sometimes a little bit of a negotiation and having some of the skills that we’ll talk about today to better advocate for yourself is important. And a lot of this stuff is not necessarily just for salary. It can be for a lot of different things. But to me, what I saw as a need here, same thing like most financial planners don’t walk you through kind of home purchase and what that looks like because most financial planners are working with people in their 50s, 60s and 70s. So that was a need for a lot of our clients who were like, “Hey, Tim, I’m buying this house. I don’t really know where to start. So we provide some education and some recommendations and advice around that. Same thing with salary, I kept seeing like well, maybe I took the job too quickly or I didn’t advocate for myself, so that’s really where we want to provide some education and advice, again, to have a better position from an income perspective. 

Tim Ulbrich: Yeah, and I think it’s a great tool to have in your toolbag, you know. And I think as we’ll talk about here, the goal is not to be an expert negotiator. There’s lots of resources that are out there that can help with this and make it tangible and practical, one of which we’ll draw a lot of the information today, I know you talk with clients, a resource I love, “Never Split the Difference” by Chris Voss. But I’m glad you mentioned, you know, I think there is often a sentiment — I know I’ve felt in myself where you know what, I’m glad to have a position, I’m glad to be making a good income. But that can be true and you still can be a good person and you still can negotiate and advocate for yourself and the value you bring to the organization. 

Tim Baker: Yes.

Tim Ulbrich: So I hope folks will hear that and not necessarily think that negotiation is bad and as we’ll talk about here in a moment, I think really can have a significant impact when you think about it as it relates to earnings over your career and what those additional earnings could mean. So Tim, break it down for us. What is negotiation and really, digging further, why is it important?

Tim Baker: Yeah, so negotiation, you know, it’s really a process of discovery. It really shouldn’t be viewed as a battle. It’s really a process of discovery. It’s kind of that awkward conversation that you should be obligated to have because you know, if you don’t want to advocate for yourself professionally, who will? And maybe you have a good mentor or something like that, but to me, the negotiation, again, is really to discover what you want and kind of what your counterpart, which might be a boss or a hiring manager or something like that. And it’s really important because settling for a lower salary can have really major financial consequences, both immediately and down the road. And you typically — raises that you receive are typically based on a percentage of your salary, so hey, we’re going to give you a 3% raise this year, a 5% raise. If you start off with a salary that you’re not happy with, then obviously that’s a problem. Accrue less in retirement savings, so that TSP, that 401k, 403b, again, you typically are going to get some type of match in a lot of cases, and then you’re going to put a percentage. So again, that could potentially be lower. But it’s not just about salary. It can be — I think another mistake that sometimes people make is that they’ll say, oh wow, I was making $125,000 and I’m taking a job that’s paying me $135,000 and they take a major step back on some of the non-salary things like benefits and flex scheduling and time off and things like that. But you know, you really want to make sure that compensation package that you have, you know, you’re happy with. Because underpaid really can make you feel resentful over the long run. So you want to make sure that you’re, again, right now we’re filming in the midst of a pandemic and the economy and the job market is tough, but you still want to advocate for yourself and make sure you’re getting the best compensation package that you can. 

Tim Ulbrich: Yeah, and as we’ll talk about here in a little bit, I think if we frame this differently, then maybe our understanding, our preconceived beliefs — you know, you mentioned it’s not a battle, you know, I think the goal is that you’re trying to come to an agreement or an understanding. And as we’ll talk about here, many employers are likely expecting this. And that number, in terms of those that are expecting versus those that are actually engaging in the conversation from an employee standpoint is very different. 

Tim Baker: Sure. 

Tim Ulbrich: So I think that might help give us confidence to be able to initiate some of those, and we’ll talk about strategies to do that. I do want to give one example, though, Tim, real quick. You had mentioned obviously if somebody earns less and receive small raises or they accrue less in retirement savings, that can have a significant impact. And I went down the rabbit hole prepping for this episode of just looking at a quick example of this where you have two folks that let’s say they both start working at the age of 28, they retire at their 65, so same starting point, same retirement age. Let’s assume they get a 3% cost of living adjustment every year for their career just to keep it simple. The only difference here is that one starts at $100,000 and one starts at $105,000. So because of either what they asked for in negotiations, whatever be the case, one starts $5,000 greater than the other. And if you play this out, same starting age, same ending age, same cost of living adjustments, one starts at a higher point, when it’s all said and done, one individual has about $300,000 more of earnings than the other. And this of course does not include differences that you also have because of higher salary. If you had a match, that would increase, that would compound, that would grow. If you were to switch jobs, you’re at a better point to now negotiate for a higher salary, all other benefits that aren’t included. But the significance of the starting point I think is something to really look at those numbers that often where you start can inform where you’re going, not only from cost of living adjustments but also future employment, right? So we know that where you start if you get a 3% raise, it’s of course going to be based off that number. If you decide to leave that employer and you go to another one, what do they ask you? How much did you make? You’re using that number. So that starting point is so critical, and I hope that new practitioners might even find some confidence in that to be able to engage in discussions knowing how significant those numbers can be over a career. So in that one example, that starting point is a difference of about $300,000. Crazy, right, when you look at it over a long time period.

Tim Baker: Yeah, it’s nuts. And I’d play the devil’s advocate, on the other side of that is again, so much — just like everything else with the financial plan, you can’t look at it in a vacuum. We’ve had clients take a lot less money and really, it was because of the student loans and how that would affect their strategy in terms of forgiveness and things like that. 

Tim Ulbrich: Yes.

Tim Baker: So it is multifactorial. It’s definitely something that it should really be examined. And I think, again, when you look at the overall context of the financial plan. But to your point, Tim, that starting salary and really how you negotiate throughout the course of your career is going to be utterly important. And again, what we say is — we kind of downplay the income because I think so much of what’s kind of taught is like, oh, six-figure salary, you’ll be OK. And that’s not true. But then it is true that it is the lifeblood of the financial plan, so I think if you have a plan and you’re intentional with what you’re doing, that’s where you can really start making moves with regard to your financial outlook.

Tim Ulbrich: Yeah, and I’m glad you said that about salary shouldn’t be looked at in a silo. I mean, just to further that point, you’ve alluded to it already, these numbers don’t matter if there’s other variables that are non-monetary that matter more. Right? Whether that be time off or satisfaction in the workplace, opportunities that you have, feelings of accomplishment. I mean, the whole list of things you can’t necessarily put a number to, I mean, I would argue if those are really important, you’ve got to weigh those against whatever this number would be. And there’s a certain point where the difference in money isn’t worth it if there’s other variables that are involved, which usually there are. Hopefully we can get both, right? Salary and non-salary items.

Tim Baker: Yes.

Tim Ulbrich: So interesting stats about negotiation, I’ve heard you present before on this topic, but I’d like you to share with our audience in terms of managers that are expecting hires to negotiate versus those that do. Talk us through some of those as I think it will help us frame and maybe change our perception on employers expecting and our willingness to engage in these conversations. 

Tim Baker: Yeah, and I really need to cite this one. And I believe this first stat comes from SHRM, which is the Society for Human Resource Management. So I think this is like the biggest association for like HR and Human Resource personnel in the country. And the stat that I use is that 99% of hiring managers expect prospective hires to negotiate. So if you think about that, you know, the overwhelming majority expect you the prospective hire to negotiate. And they build their initial offers as such. So the example I give to clients is like, hey, we have a position that we could pay anywhere from $110,000 to $130,000, knowing that you know, Tim, if I’m offering this job to you, knowing that you’re probably going to negotiate with me. I’m going to offer it to you for $110,000 knowing that I have a little bit of wiggle room if you kind of come back with a counteroffer. But what a lot of my clients or people do that I talk with is they’ll just say, yes, I found a job, crappy job market, happy to get started, ready to get started. And they’re either overly enthusiastic to accept a job or they’re just afraid that a little bit of negotiation would hurt their outlook. So with that in mind is that you — the offers I think are built in a way that you should be negotiating and trying to, again, advocate for yourself. 

Tim Ulbrich: Yeah, and so if people are presenting positions often with a range in salary expecting negotiation, I hope that gives folks some confidence in OK, that’s probably expected and maybe shifts some of the perception away from, this whole thing could fall apart, which it could, right? At any given point in time, especially depending on the way you conduct yourself in that negotiation, which I think is really, really important to consider. But I think what we want to try to avoid, Tim, back to a comment you made earlier, is any resentment as well. I mean, if we think about this from a relationship standpoint, we want the employee to feel valued, and we want the employer to have a shot at retaining this individual long-term. So it’s a two-way relationship.

Tim Baker: Yeah, and it kind of comes up to where we were talking about what is the goal of negotiation. And really, the goal of negotiation is to come to some type of agreement.

Tim Ulbrich: Yeah. 

Tim Baker: The problem with that is that people are involved in this. And we as people are emotional beings, so if we feel like that we’re treated unfairly or we don’t feel safe and secure or if we’re not in control of the conversation, our emotions can get the best of us. So that’s important. So again, there’s some techniques that you can utilize to kind of mitigate that. But you know, to allude to your point about negotiating, the fear to kind of potentially mess up the deal, there’s a stat that says 32% don’t negotiate because they’re too worried about losing the job offer. 

Tim Ulbrich: Yeah. 

Tim Baker: I know, Tim, like we can attest to this because with our growth at YFP, we’ve definitely done some human resourcing, to use that as a verb, and hiring and things like that of late. And I’ve got to say that the — I think that some of this can be unfounded just because there’s just so much blood, sweat and tears that goes into finding the right people to kind of surround yourself with and bring into an organization that to me, a little bit of back-and-forth is not going to ultimately lose the job. So typically most jobs, there’s — obviously there’s an application process, there’s interviews, there’s second interviews, there’s maybe on-site visits, there’s kind of looking at all the candidates and then extending offers. If you get to that offer stage, you’re pretty — they’ve identified as you’re the person that they want. So sometimes a little bit of back-and-forth is not going to derail any such deal. So it’s really, really important to understand that.

Tim Ulbrich: Yeah, and as the employer, I mean, we’ve all heard about the cost statistics around retention. So as an employer, when I find that person, I want to retain them. That’s my goal, right? I want to find good talent, I want to retain good talent. So I certainly don’t want somebody being resentful about the work that they’re doing, the pay that they have, and so I think if we can work some of that out before beginning, come to an agreement, it’s a good fit for us, good fit for them, I think it’s also going to help the benefit of hopefully the long-term relationship of that engagement. So it’s one thing to say we should be doing it. It’s another thing to say, well how do we actually do this? What are some tips and tricks for negotiation? So I thought it would be helpful if we could walk through some of the stages of negotiation. And through those stages, we can talk, as well as beyond that, what are some actual strategies to negotiation. Again, another shoutout to “Never Split the Difference” by Chris Voss. I think he does an awesome job of teaching these strategies in a way that really helps them come alive and are memorable.

Tim Baker: Yeah.

Tim Ulbrich: So Tim, let’s talk about the first stage, the interview stage, and what are some strategies that those listening can take when it comes to negotiation in this stage.

Tim Baker: Yeah, so when I present these concepts to a client, I kind of said that the four stages of negotiation are fairly vanilla, you know? And the first one is that interview. So when you get that interview, what I say is typically you want to talk less, listen more and learn more. Typically, the person that is talking the most is not in control of the conversation. The one that’s listening and asking good questions is in control. And I kind of think back to some of our recent hires, and you know, the people that we identified as like top candidates, I’m like, man, their interviews went really well. And when I actually think back and slow down, it’s really — I think that they went really well because it’s really that person asking good questions and then me just talking. And that’s like the perception. So in that case, the candidate was asking us good questions and we’re like, yeah, this was a great interview because I like to hear myself talk or I just get really excited about what we’re doing at YFP. So I think if you can really focus on your counterpart, focus on the organization, whether it’s the hospital or whatever it is and learn and then really pivot to the value that you bring, I think that’s going to be most important. So you know, understanding what some of their pain points are, whether it’s retention or maybe some type of care issue or whatever that may be, you can kind of use that to your advantage as you’re kind of going through the different stages of negotiation. But the more that the other person talks, the better. I would say in the interview stage, one of the things that often comes up that can come up fairly soon is the question about salary. And you know, sometimes that is — it’s kind of like a time savings. So it’s a “Hey, Tim, what are you looking for in salary?” If you throw out a number that’s way too high, I’m not even going to waste my time. And what I tell clients is like you typically, you want to — and we’ll talk about anchoring. You really want to avoid throwing a number out for a variety of reasons. So one of the deflections you can use is, “Hey, I appreciate the question, but I’m really trying to figure out if I’d be a good fit for your organization. Let’s talk about salary when the time comes.” Or the other piece of it is it’s just you’re not in the business of offering yourself a job. And what I mean by that it’s their job to basically provide an offer. So, “Hey, my current employer doesn’t really allow me to kind of reveal that kind of information. What did you have in mind?” Or, “We know that pharmacy is a small business, and I’m sure your budget is reasonable. What did you have in mind?”

Tim Ulbrich: Right. 

Tim Baker: So at the end of the day, it’s their job to extend the offer, not you to kind of negotiate against yourself, which can happen. You know? I had — we signed on a client here at YFP Planning yesterday, and we were talking about negotiation. I think it had to do with a tax issue. And you know, he basically said this is what he was looking for and when he got into the organization, I think he saw the number that was budgeted for it, and it was a lot more. So again, if you can deflect that — and I tell a story, when I first got out of the Army, I kind of knew this. But when I first got out of the Army, I was interviewing for jobs. I was in an interview, and I deflected and I think the guy asked me again, and I deflected. I think he asked me for like — maybe he asked me four times, and I just wound up giving him a range that was like obnoxious, $100,000-200,000 or something like that. But to me, that — and the interview didn’t go well after that, but to me, it was more about clearing the slate instead of actually learning about me and seeing if I was a good fit. So you never want to lie if they ask about your current salary, you never want to lie. But you definitely want to deflect and move to things like OK, can I potentially be a good fit for your organization and then go from there.

Tim Ulbrich: Yeah, and I think deflection takes practice, right? 

Tim Baker: Yeah. 

Tim Ulbrich: I don’t think that comes natural to many of us.

Tim Baker: Absolutely. Yeah.

Tim Ulbrich: This reminds me, so talk less, listen more for any Hamilton folks we have out there, which is playing 24/7 in my house these days, the soundtrack. I’m not going to sing right now, but talk less, smile more, don’t let them know what you’re against or what you’re for. So I think that’s a good connection there to the interview stage. So next hopefully comes good news, company wants to hire you, makes an offer. So Tim, talk us through this stage. What should we be remembering when we actually have an offer on the table? 

Tim Baker: Yeah, so I think you definitely want to be appreciative and thankful. Again, when a company gets to a point where they’re an extending you an offer, that’s huge. I remember when I got, again, my first offer out of the Army — because again, you didn’t really have a choice when you’re in the Army. Well, I guess you do have a choice, but they’re not like, “Here’s a written offer for your employment in this platoon somewhere in Iraq.” But I remember getting the first offer. I’m like, man, this is awesome. Shows your salary and the benefits and things like that, so you want to be appreciable and thankful — appreciative and thankful. You don’t want to be — you want to be excited but not too overexcited. So you don’t want to appear to be desperate. What I tell clients, I think the biggest piece here is make sure you get it in writing. And I have a story that I tell because if it’s not in writing, and what I essentially said is it didn’t happen. So again, using some personal experience here, first job out of the Army, I had negotiated basically an extra week of vacation because I didn’t want to take a step back in that regard. And I got the offer, and the extra week wasn’t there. So I talked to my future boss about it, and he said, “You know what, I don’t want to go back to headquarters and ruffle some feathers, so why don’t we just take care of that on site here?” And this was the job I had in Columbus, Ohio. And I said, “Yeah, OK, I don’t really want to ruffle feathers either.” The problem with that was when he got replaced, when he was terminated eight months later, that currency burned up fairly quickly. So I didn’t have that extra week of vacation. So if it’s not written down, it never happened. So you want to make sure that you get it in writing and really go over that written offer extensively. So some employers, they’ll extend an offer, and they want a decision right away. I would walk away from that. To me, a job change or something of that magnitude, I think it warrants a 24-, if not a minimum 48-hour timeframe for you to kind of mull it over. And this is typically where I come in and help clients because they’ll say, “Hey, Tim, I got this offer. What do you think?” And we go through it and we look at benefits and we look at the total compensation package and things like that. But you want to ask for a time, some time to review everything. And then definitely adhere to the agreed-upon deadline to basically provide an answer or a counteroffer or whatever the next step is for you.

Tim Ulbrich: Yeah, and I think too, the advice to get it in writing helps buy you time, you know? I think you ask for it anyways. And I think the way you approach this conversation, you’re setting up the counteroffer, right? So the tone that you’re using, it’s not about being arrogant here, it’s not about acting like you’re not excited at all. I think you can strike that balance between you’re appreciative, you’re thankful, you’re continuing to assess if it’s a good fit for you and the organization, you want some time, you want it in writing, and you’re beginning to set the stage. And I think human behavior, right, says if something is either on the table or pulled away slightly, the other party wants it a little bit more, right? 

Tim Baker: Yes.

Tim Ulbrich: So if I’m the employer and I really want someone and I’m all excited about the offer and I’m hoping they’re going to say yes and they say, “Hey, I’m really thankful for the offer. I’m excited about what you guys are doing. I need some time to think about x, y and z,” or “I’m really thinking through x, y or z,” like all of a sudden, that makes me want them more. You know? 

Tim Baker: Sure.

Tim Ulbrich: So I think there’s value in setting up what is that counteroffer. So talk to us about the counteroffer, Tim. Break it down and some strategies to think about in this portion.

Tim Baker: Yeah, so you know, the counteroffer is I would say — the majority of the time, you should counter in some way. I think you’re expected to make a counter. And again, we kind of back that up with some stats. But you also, you need to know when not to kind of continue to go back to the negotiating table or when you’re asking or overasking. So I think research is going to be a good part of that. And what I tell clients is like, I can give them a very non-scientific — I’ve worked with so many pharmacists that I can kind of say, eh, that sounds low for this community pharmacy industry, or whatever, hospital, in this area. So your network, which could be someone like me, it could be colleagues, but it could also be things like Glass Door, Indeed, Salary.com. So you want to make sure that your offer, your counteroffer is backed up in some type of fact. And really, knowing how to maximize your leverage. So if you are — if you do receive more than one substantial offer from multiple employers, negotiating may be appropriate if the two positions are comparable. Or if you have tangible evidence that the salary is too low, you have a strong position to negotiate. So I had a client that knew that newly hired pharmacists were being paid more than she was, and she had the evidence to show that and basically they went back and did a nice adjustment. But again, I think as you go through — the way that we kind of do this with clients is we kind of go through the entire letter and the benefits. And I basically just highlight things and have questions about match or vacation time or salary, things like that. And then we start constructing it from there. So if you look at, again, the thing where most people will start is salary is you really want to give — when you counter, you really want to give a salary range rather than like a number. So what I say is, if you say, “Hey, Tim, I really want to make $100,000.” I kind of said it’s almost like the Big Bad Wolf that blows the house down. Like all of those zeros, there’s no substance to that. But if you said, “Hey, I really want to make $105,985,” the Journal of the Experimental Social Psychology says that using a precise number instead of a rounded number gives it a more potent anchor. 

Tim Ulbrich: You’ve done your homework, right? 

Tim Baker: Yeah. You know what you’re worth, you know what the position’s worth, it’s giving the appearance of research. So I kind of like — it’s kind of like the Zach Galfinakis meme that has all of the equations that are floating, it’s kind of like that. But the $100,000, you can just blow that house over. So and I think — so once you figure out that number, then you kind of want to range it. So they say if you give a range of a salary, then it opens up room for discussion and it shows the employer that you have flexibility. And it gives you some cushion in case you think that you’re asking for a little bit too high. So that’s going to be really, really important is to provide kind of precise numbers in a range. And oh, by the way, I want to be paid at the upper echelon of that.

Tim Ulbrich: So real quick on that, you mentioned before the concept of anchoring, and I want to spend some time here as you’re talking about a range. So dig into that further, what that means in terms of if I’m given a range, how does anchoring fit into that?

Tim Baker: Yeah, so we kind of talk about this more when we kind of talk some of the tools and the behavior of negotiation. But the range — so when we talk about like anchoring, so anchoring is actually — it’s a bias. So anchoring bias describes the common tendency to give too much weight to the first number. So again, if I can invite the listener to imagine an equation, and the equation is 5x4x3x2x1. And that’s in your mind’s eye. And then you clear the slate, and now you imagine this equation: 1x2x3x4x5. Now, if I show the average person and I just flash that number up, the first number — the first equation that starts with 5 and the second equation that starts with 1, we know that those things equal the same thing. But in the first equation, we see the 5 first, so it creates this anchor, creates this belief in us that that number is actually higher. 

Tim Ulbrich: Yeah, bigger, yeah. 

Tim Baker: So the idea of anchoring is typically that that number that we see really is a — has a major influence, that first number is a major influence over where the negotiation goes. So you can kind of get into the whole idea of factoring your knowledge of the zone of possible agreement, which is often called ZOPA. So that’s the range of options that should be acceptable for both sides, and then kind of assessing your side of that and then your other party’s anchor in that. So there’s lots of things that kind of go into anchoring, but we did this recently with a client where I think they were offered somewhere in like the $110,000-112,000 area. And she’s like, I really want to get paid closer to like $117,000-118,000. So we basically in the counteroffer, we said, “Hey, thanks for the offer.” And we did something called an accusation, which we can talk about in a second. But “Thanks for the counteroffer, but I’m really looking to make between” — you know, I think we said something like $116,598 to all the way up into the $120,000s. And they actually brought her up to I think she was at $117,000 and change. So it actually brought her up closer to that $118,000. So using that range and kind of that range as a good anchoring position to help the negotiation. 

Tim Ulbrich: Yeah, love it. 

Tim Baker: There’s lots of different things that kind of go into anchoring in terms of extreme anchoring and a lot of that stuff that they talk about in the book, but again, that kind of goes back to that first number being thrown out there can be really, really integral. And again, when you couple that on top of hey, it’s their job to make you an offer, not the other way around, you have to really learn how to deflect that and know how to position yourself in those negotiations. But that’s really the counteroffer. And what I would say to kind of just wrap up the counteroffer is embrace the silence. 

Tim Ulbrich: Yeah. 

Tim Baker: So Tim, there was silence there, and I’m like, I want to fill the void. And I do this with clients when we talk about mirroring and things like that. Like people are uncomfortable with silence. And what he talks about in the book, which I would 100% — this is really kind of a tip of the cap to Chris Voss and his book, which I love, I read probably at least once a year, where he talks about embracing the silence. We as people are conditioned to fill silences. So he talks about sometimes people will negotiate against themselves. If you just sit there and you say, “Uh huh. That’s interesting.” And then in the counter, just be pleasantly persistent on the non-salary terms, which can be both subjective and objective in terms of what you’re looking for in that position.

Tim Ulbrich: Yeah, and I want to make sure we don’t lose that. We’re talking a lot about salary, but again, as we mentioned at the beginning, really try to not only understand but fit what’s the value of those non-salary terms. So this could be everything from paid time off to obviously other benefits, whether that be health or retirement. This of course could be culture of the organization, whether it’s that specific site, the broader organization, opportunities for advancement. 

Tim Baker: Mentorship. Yep. Mentorship.

Tim Ulbrich: Yes, yes.

Tim Baker: Yep, all of that.

Tim Ulbrich: And I think what you hear from folks — I know I’ve felt in my own personal career, with each year that goes on, I value salary, but salary means less and those other things mean more. And so as you’re looking at let’s just say two offers, as one example, let’s say they’re $5,000 apart. I’m not saying you give on salary, but how do you factor in these other variables. 

Tim Baker: Yeah. Well, and I think too — and this is kind of next level with this, and I’ll give you some examples to cite it. I think another thing to potentially do when you are countering and when you’re shifting to some of maybe the non-salary stuff is really took a hard look at your potential employer or even your current employer if you’re an incumbent and you’re being reviewed and you’re just advocating for a better compensation, is look at the company’s mission and values. So the example I give is like when Shay and I got pregnant with Liam, she didn’t have a maternity leave benefit. And when she was being reviewed, we kind of invoked the company — and I think it’s like work-life balance and things like that — and we’re like, “Well, how can you say that and not back that up?” And again, we did it tactfully. Because you’re almost like negotiating against yourself, right? So when I present this to clients, the Spiderman meme where two Spidermans are pointing at each other, and she was able to negotiate a better, a maternity — and we look at us, and I give these, one of our values is encouraging growth and development. So if an employee says, hey, and they make a case that I really want to do this, it’s almost like we’re negotiating against ourselves. So I think if you can — one, I think it shows again the research and that you’re really interested and plugged into what the organization is doing — but then I think you’re leveraging the company against itself in some ways because you’re almost negotiating against well, yeah, we put these on the wall as something that we believe in. But we’re not going to support it or you know. Or at the very least, it plants a seed. And that’s what I say is sometimes with clients, we do strike out. It is hard to move the needle sometimes, but at least one, we’ve got an iteration under our belts where we are negotiation, and two, we’ve planted a seed with that employer — assuming that they took the job anyway — that says OK, these are things that are kind of important to me that we’re going to talk about again and things like that. So I think that’s huge.

Tim Ulbrich: Good stuff. So let’s talk about some tools that we can use for negotiation. And again, many of these are covered in more detail in the book and other resources, which we’ll link to in the show notes. I just want to hit on a few of these. Let’s talk about mirroring, accusation audits, and the importance of getting a “That’s right” while you’re in these conversations. And we’ll leave our listeners to dig deeper in some of the other areas. So talk to us about mirroring. What is it? And kind of give us the example and strategies of mirroring. 

Tim Baker: Yeah, and I would actually — Tim, what I would do is I would actually back up because I think probably one of the most important tools that are there I think is the calibrated question. So that’s one of the first things that he talks — and the reason, so what is a calibrated question? So a calibrated question is a question with really no fixed answer that gives the illusion of control. So the answer, however, is kind of constrained by that question. And you, the person that’s asking the question, has control of the conversation. So I give the example, when we moved into our house after we renovated it — so brand new house. I walk into my daughter’s room, I think she was 4 at the time, and she’s coloring on the wall in red crayons. And I’m from Jersey, so I say “crown” not “crayon.” And I look at her, and I say, “Olivia, why are you doing that?” And she sees how upset I am and mad and she just starts crying. And there’s no negotiation from there.

Tim Ulbrich: Negotiation over.

Tim Baker: There’s no exchange of information. So in an alternate reality, in an alternate reality, what I should have done is said, “Olivia, what caused you to do that?” So you’re basically blasting — instead of why — why is very accusatory — you’re like, the how and the what questions are good. So and of course she would say, “Well, Daddy, I ran out of paper, so the wall is the next best thing.” So the use of — and having these calibrated questions in your back pocket, I think again buys you some time and really I think frames the conversation with your counterpart well. So using words like “how” and “what” and avoiding things like “why,” “when,” “who.” So, “What about this works, doesn’t work for you?” “How can we make this better for us?” “How do you want to proceed?” “How can we solve this problem?” “What’s the biggest challenge you face?” These are all — “How does this look to you?” — these are all calibrated questions that again, as you’re kind of going back and forth, you can kind of lean on. So have good how and what questions. To kind of answer the question about mirroring, as you’re asking these questions, you’re mirroring your counterpart. So what mirroring, the scientific term is called isopraxism. But he defines and says “the real-life Jedi mind trick.” This causes vomiting of information is what he says. So you know, these are not the droids you’re looking for. So what you essentially is you repeat back the last 1-3 words or the critical words of your counterpart’s sentence, your counterpart’s sentence. So this is me mirroring myself. Yeah, well you want to repeat back because you want them to reveal more information. And you want to build rapport and have that curiosity of kind of what is the other person thinking so you can, again, come to an agreement. Come to an agreement? Yeah. So at the end of the day, the purpose — so this is mirroring. So I’ll show you a funny story. I practice this on my wife sometimes, who does not have a problem speaking. But sometimes the counterpart is —

Tim Ulbrich: She’s listening, by the way.

Tim Baker: Yeah, exactly. So I’ll probably be in trouble. But so I basically just for our conversation, just mirror back exactly what she’s saying. And you can do this physically. You can cross your legs or your arms or whatever that looks like. But what he talks about more is with words. And you know, I’ll basically just mirror back my wife, and she — at the end of the conversation, she’ll say something like, “Man, I feel like you really listened to me.” And I laugh about that because I’m just really repeating back. But if you think about it, I did. Because for you to be able to do that, you really do have to listen. So mirroring, again, if you’re just repeating back, you really start to uncover more of what your counterpart is thinking because often, like what comes out of our mouth the first or even second time is just smoke. So really uncovering that. One of the things he talks about is labeling where this is kind of the — it’s described as the method of validating one’s emotion by acknowledging it. So, “It seems like you’re really concerned about patient care. It seems like you’re really concerned about the organization’s retention of talent. So what you’re doing is that you’re using neutral statements that don’t involve the use of “I” or “we.” So it’s not necessarily accusatory. And then you are — same with the mirror. You really want to not step on your mirror. You want to not stop on your label and really invite the other person to say, “Yeah, I’m just really frustrated by this or that.” So labeling is really important to basically defuse the power, the negative emotion, and really allow you to remain neutral and kind of find out more about that. So that’s super important.

Tim Ulbrich: Yeah, and I think with both of those, Tim, as you were talking, it connects well back to what we mentioned earlier of talk less, listen more. 

Tim Baker: Yeah.

Tim Ulbrich: Like you’re really getting more information out, right, from a situation that can be guarded, you know, people are trying to be guarded. And I think more information could lead hopefully to a more fruitful negotiation. What about the accusation audit?

Tim Baker: Yeah, so the accusation audit, it’s one of my favorites, kind of similar with calibrated questions. I typically will tell clients, I’m like, “Hey, if you don’t learn anything from this, I would say have some calibrated questions in your back pocket and have a good accusation audit at the ready.” And we typically will use the accusation audit to kind of frame up a counteroffer. So it kind — so before I give you the example, the accusation audit is a technique that’s used to identify and label probably like the worst thing that your counterpart could say about it. So this is all the head trash that’s going on of why I don’t want to negotiate. It’s like, ah, they’re going to think that I’m overasking or I’m greedy, all those things that you’re thinking. So you’re really just pointing to the elephant in the room and you’re just trying to take this thing out and really let the air out of the room where a lot of people just get so nervous about this. So a good accusation audit is, “Hey, Tim, I really appreciate the offer of $100,000 to work with your organization. You’re probably going to think that I’m the greediest person on Planet Earth, but I was really looking for this to that.” 

Tim Ulbrich: That’s a great line. Great line.

Tim Baker: Or, “You’re probably thinking that I’m asking way too much,” or, “You’re probably thinking that I’m way underqualified for this position, but here’s what I’m thinking.”

Tim Ulbrich: “No. No, no, no, Tim.”

Tim Baker: Right. So when someone says that to me, I’m like, “No. I don’t think that.” And what often happens — and again, clients have told me this — what often happens is that the person, the counterpart that they’re working with, like they’re recruited as — one person said, one client was like, “Oh, we’re going to find you more money. We’re going to figure it out.” So they like — so when someone says that to you, just think about how you would feel. “Oh, I don’t think that at all.” And then it just kind of lets the air out of the room. So you basically preface your counteroffer with like the worst thing they could say about you, and then they typically say, “That’s not true at all.” 

Tim Ulbrich: Yeah.

Tim Baker: So I love the accusation audit. So simple, it’s kind of easy to remember. And I think it just lays I think the groundwork for just great conversation and hopefully a resolution. 

Tim Ulbrich: That’s awesome. And then let’s wrap up with the goal of getting to a “That’s right.” I remember when I was listening to an interview with Chris Voss, this was a part that I heard and I thought, wow, that’s so powerful. If you can get — in the midst of this negotiation, if we can get to a “Yeah, that’s right,” the impact that could have on the impact. 

Tim Baker: Yeah, so he kind of talks about it like kind of putting all of these different tools together. So it’s mirroring and labeling and kind of using I think what he calls minimal encouragement, “Uh huh,” “I see,” kind of paraphrasing what you hear from your counterpart. And then really wait for — it’s like, “Hey, did I get that right? Am I tracking?” And what you’re really looking for is a “That’s right.” He said that’s even better than a “Yes.” So one of the examples I give is when I speak with prospective clients, we’re talking about my student loans and my investment portfolio and I’m doing real budgeting, and I got a sold a life insurance policy that I think isn’t great for me. And so we go through all of these different parts of the financial plan. And I’m basically summarizing back what they’re saying. And I say, you know, at the end of it — so I’m summarizing 30 minutes of conversation. And I’m saying, “Did I get that right?” And they’re like, “Yeah, that’s right. You’re a great listener,” which I have to record for my wife sometimes because she doesn’t agree with me. So that’s what you’re looking for is “Yeah, that’s right.” This person has heard, message sent, heard, understand me. He says if you get a “You’re right,” so sometimes, again, I keep talking about my wife, I’m like, “Hey, we have to do a better job of saving for retirement,” and she’s like, “You’re right.” That’s really code for “Shut up and go away.” So it’s a “That’s right” really what we’re looking for.

Tim Ulbrich: Awesome.

Tim Baker: So that’s very powerful.

Tim Ulbrich: That’s great stuff. And really, just a great overall summary of some tips within the negotiation process, the steps of the negotiation process, how it fits into the financial plan. We hope folks walk away with that and just a good reminder of our comprehensive financial planning services that we do at YFP Planning. This is a great example of when we say “comprehensive,” we mean it. So it’s not just investments, it’s not just student loans. It’s really every part of the financial plan. Anything that has a dollar sign on it, we want our clients to be in conversation and working with our financial planners to make sure we’re optimizing that and looking at all parts of one’s financial plan. And here, negotiation is a good example of that. So we’ve referenced lots of resources, main one we talked about here today was “Never Split the Difference” by Chris Voss. We will link to that in our show notes. And as a reminder to access the show notes, you can go to YourFinancialPharmacist.com/podcast, find this week’s episode, click on that and you’ll be able to access a transcription of the episode as well as the show notes and the resources. And don’t forget to join our Facebook group, the Your Financial Pharmacist Facebook group, over 6,000 members strong, pharmacy professionals all across the country committed to helping one another on their own path and walk towards financial freedom. And last but not least, if you liked what you heard on this week’s episode of the podcast, please leave us a rating and review on Apple podcasts or wherever you listen to the show each and every week. Have a great rest of your day.

Tim Ulbrich: As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published.  Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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YFP 338: Stepping Into Your Inner Radiance in 2024 with Dr. Christina Fontana

Posted on by YFP Media

Dr. Christina Fontana, creator of The Pharmacist Coach, shares her journey from pharmacy to entrepreneurship, healing from trauma, and setting goals.

Episode Summary

In this episode of the YFP Podcast, we welcome Dr. Christina Fontana, PharmD, the visionary creator of The Pharmacist Coach. Dr. Fontana shares her inspiring journey from pharmacy to entrepreneurship, revealing the impact of her early experiences and the resilience that fueled her pursuit of a purpose-driven path. From navigating personal challenges like eating disorders and anxiety to healing from childhood trauma, Dr. Fontana discusses her commitment to inner work and counseling as essential components of her transformative process. The episode also explores the intertwined nature of personal growth and business development, with insights into Dr. Fontana’s methodology of “structured flexibility.” The discussion concludes with a focus on mindset and goal-setting strategies for pharmacists, encouraging alignment with one’s true desires and an embodiment of authenticity. Tune in for a captivating exploration of career empowerment, resilience, and setting ambitious goals for the year ahead.

About Today’s Guest

Dr. Christina Fontana, AKA The Pharmacist Coach, is a pharmacist, holistic healer, rapid transformation business coach, speaker, and 5-time author. She helps spiritually-driven women to ‘Reignite Your Light’ and shine in your brilliance, confidence, and true essence. 

She started her entrepreneurial journey 11 years ago being disempowered, homelessness, broke, with eating disorders, PTSD, and anxiety and has since transformed, turning her pain into purpose, empowering women all over the world to step into more purpose, power, and prosperity.

Over the last 11 years, Dr. Christina has been providing uplifting, transformational content through her Youtube videos, books, courses, programs, and Conferences. Her mission is to empower more healers and business owners unlock their innate gifts to create a domino effect of healing on the world.

Key Points From the Episode

  • Career, trauma, and entrepreneurship with Dr. Christina Fontana. 
  • Career journey and goal setting in pharmacy. [1:53]
  • Eating disorders, perfectionism, and self-discovery in pharmacy school. [5:06]
  • Trauma, intuition, and decision-making. [11:19]
  • Healing from childhood trauma and inner work for personal growth. [16:00]
  • Personal growth and business development. [19:57]
  • Personal growth through entrepreneurship and parenting. [28:19]
  • Mindset and goal setting for pharmacists. [32:20]
  • Setting goals and being flexible in entrepreneurship. [39:38]

Episode Highlights

“All of these tools that I’ve learned throughout the years, I now help people with. And someone I was I was working at a retreat one time, and somebody came up to me, they’re like, You should call it like rapid transformation, because people shift so quickly, because I, because I’m so intuitive. And I’ve developed that muscle so much within myself, I can look at someone and say, okay, and coach them and ask them these questions that are going to draw out of them.” – Dr. Christina Fontana  [17:44]

“I grew up in a very suppressive environment, and it doesn’t allow for you to tap into who you really are, the creativity, the gifts and that’s why I bring this work into helping entrepreneurs because if you’re suppressed, you’re not going to show up fully self expressed when you give a talk, when you go to put your message out there this work is so much of you know, the inner work, but also the practical strategy of how do I bring all of who I am to the table when I am speaking, so that I show up with power, conviction. And that’s how you influence people because then they know you care, they see the passion that you have. And that’s how you start to create a domino effect of healing in the world. Which is really why I believe I’m here is at the root cause it’s to be a beacon of light for other people and that’s why I’m so vulnerable in my story.” – Dr. Christina Fontana  [18:45]

“Translate your gifts into gold.” -Dr. Christina Fontana  [21:38]

“But when you when you embody that version of yourself, like tapping into the energy of this is what I want this is who would I have to be to achieve that goal? Because there’s usually an evolution or a next version of yourself, right? Maybe a higher version of yourself? What would that be? And feeling into that frequency?” -Dr. Christina Fontana  35:28

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week I welcome Dr. Christina Fontana, creator of The Pharmacist Coach. We talk about her career journey in a pharmacy, her trauma experience growing up in an abusive household and how that shaped who she is today, and her entrepreneurial journey focused on empowering others to transform their lives reveal their inner radiance and step into more energy, confidence and power. We then wrap up the show by discussing strategies for getting in the right mindset to set big goals for 2024. Let’s hear a brief message from YFP team member Justin Woods, and then we’ll jump into my interview with Dr. Christina Fontana.

AD SPOT  00:45

This is Justin Woods from the YFP team with a quick message before the show. If you listen to the YFP Podcast, you may learn something every now and then, either from Tim Ulbrich, Tim Baker, or one of our guests. A lot of people listen to the show, but they may not execute or implement the things they learned. As pharmacists, we know the impact of non-adherence on patient outcomes and their overall well being. As a pharmacist, myself and part of the YFP team. I talk with pharmacists every day who are confused about how to implement financial knowledge. Pharmacists share with me that they’re treading water financially, maybe took a DIY approach, reached a plateau and are confused about what to do next. Or those who worked for decades can see the light at the end of the tunnel, and feel uncertain about how the next chapter will unfold. If that sounds like you, one, it is not uncommon to feel that way. And two, does it make sense for us to have a conversation to see if YFP Planning can help you visit YFPplanning.com or follow the link in the Show Notes to find a time that works for your schedule.

Tim Ulbrich  01:50

Christina, welcome to the show. 

Dr. Christina Fontana  01:53

Thank you so much. We’re here on a Monday morning and it’s raining. So, bring in the sunshine.

Tim Ulbrich  01:58

It’s a great way to start a Monday, especially when as you mentioned it’s cloudy, it’s rainy, it’s cold, but you very much have the holiday spirit wearing your your polar bear gear. I love that. And I know the energy you’re going to bring to the show is going to light lighten the mood that has been set by the outside weather. So I’m really looking forward to this opportunity to interview you. We’re going to unpack your career journey, we’ll talk about your entrepreneurial journey. And then I’m gonna pick your brain about advice you would have for our community listening about how you think about goal setting, as well as how you coach others on goal setting as we get ready to turn the page onto 2024. So let’s start with your career journey in pharmacy. What led you into the profession? Where did you go to pharmacy school? And what was some of the work that you did upon graduation? 

Dr. Christina Fontana  02:45

Yeah, so my dad was a pharmacist. I’m from a family full of pharmacists. So my uncle, my aunt, my sister, my dad, we all went to St. John’s University and I grew up working in my dad’s store back from when I was like three years old, sweeping the floors, helping people find, you know, cards for their granddaughter, working the register. Really, I learned my people skills, my dad would always say, Alright, go talk to that person. Go help that person, go sweep the floor. And I think that those early experiences really helped me to kind of plant those seeds of number one customer service. My dad was, he knew everybody’s name. He knew like, what every customer, what their kids’ names were, what sports they were in. And I just would watch him in awe and be like, Wow, he’s just so…how do you know all this and then he knew all the drugs too in the back. You’re amazing. So I was both in awe of my father, but also extremely terrified of him because he was a strong Italian dad, very strict, very controlling. And I actually grew up and I’m very open about this with a lot of abuse. So physical and mental, emotional. I loved my dad and I still do to this day. And I see now that that was an experience that I went through to strengthen my character to be who I am today. And I’ve gone through a lot of healing through that and but like kind of back to what you know, back at the pharmacy, so there was all of that going on. So like I loved him, I admired him. He taught me so much and he was so charismatic, intelligent. And so I absorbed all of that I was like a sponge, you know, from a very early age. And I knew in those interactions with people that were at the counter. That’s really where I like loved talking to people and hearing about their stories or what they were doing for the day. I grew to love people. And I just knew in my heart like I felt this, this rush in my body whenever someone was like, “Oh my God, you really helped me!” I was like, This is my purpose and so from probably around 13-14 years old, I knew that I wanted to help people. And so in my mind, I was like, oh, pharmacy. So the day that I got into pharmacy school, I feel like my whole world opened up, I was so excited. It was like this whole new adventure. And at the same time, there was this internal struggle that was happening within me. So I had an eating disorder in high school where, you know, I was anorexic. Put a lot of pressure on myself. Highly perfectionistic. Does this sound familiar, pharmacists, right? And so my trauma showed up in my body as an eating disorder high, you know, high levels of anxiety. I was a high performer, you know, like, I did kick line dance, all these different things, all throughout my childhood. Because that was what I thought I had to be in order to be loved by and accepted by my family. And so I went through pharmacy school, my head was down, you know, I, I actually developed a different eating disorder at that time. So it was night eating syndrome. That’s a whole other story. But essentially, what I learned was that my going through my healing journey, my nervous system was so overloaded from all of that trauma, the high performing, trying to be perfect, all of those things, that eventually had to come out somewhere because I suppressed my emotions. And you and I could talk about this for hours. But fast forward to kind of as I was going through pharmacy school, I was kind of struggling internally with all of this, you know, my eating disorder, anxiety, it just got compounded because it’s so much pressure to be in pharmacy school to make sure that you’re, you know, making the most out of your social time and, you know, the commute and all of the other things that come with being, you know, in pharmacy school, that pressure. So eventually, I got to the end of my career, or my, my time at St. John’s. And I started to look at all of these different opportunities. And I was really excited about pursuing a residency. And so I, I told my, my family, and I knew they weren’t going to be happy about it, because again, my dad owned this pharmacy and groomed me and, you know, helped me for years, and I just said, I’m like, I want to do this other path. And when I said that, he was not happy, because again, I was a people pleaser, I did whatever my parents said. I was a good girl, all of that. And so what I was, what he was saying back to me was like, you know, how could you do this to us? Like, you’re betraying us, you know, I helped you blah, blah, blah. And I didn’t care. For the first time in my life, I just felt it in my gut. And I think it was the dynamic to have probably somewhat of a toxic environment that I was already in, in that pharmacy setting. Combined with this drive that I had in my in this, again, I felt that feeling in my heart, like this is what I’m supposed to be doing. And so I always say to people, you know, I know, you have to use logic, of course, but also using your intuition like what feels aligned and right to me, that was probably the first time in my life that I actually let that voice be louder than the fear of what are they going to say I have to be perfect all that. So I did, I wound up pursuing the residency and living in that in my parents house with walking on eggshells and feeling like I couldn’t really, like tell them what was happening because I had to go to mid-year and I had to like, develop a CV for the first time and business cards and all of that. And I actually didn’t get any of my top five choices, because you have to pick five residencies that you want to match with. And I was like, devastated. And I didn’t know what to do. So I was talking to one of my professors at St. John’s one day, and she’s like, “oh, like, why don’t you try through the scramble. There’s a King’s Pharmacy in Brooklyn that I think I saw it didn’t match.” So I was like, let’s see if this goes. I went and interviewed and I got the call that I got this residency. But that was the beginning of the crumble of my life because that was when I got kicked out of my house. I my parents pretty much disowned me and you know, all of my stuff was thrown out onto the lawn- hangers, clothes, you know, everything that was my life, from my childhood room, where I was still living at home with them was literally purged onto the lawn. So all my neighbors were probably like, what is happening right now? So, I literally had to pick up the pieces of my life and start fresh like that was my rock bottom. At that time, I was taking anxiety medication. My life was so unworkable, because I wasn’t really speaking my truth. And all of these patterns that people pleasing, the perfectionism, the unworthiness that I had, it all kind of culminated into this moment where I was like, I’m choosing this, I’m choosing this new path. I don’t care how scary it is. And I remember looking up at the sky, and I just was like, it’s gonna be okay. I just had this feeling in my heart that even though my life was a mess, physically, everything was all over the lawn. And, you know, I couldn’t, I wasn’t even allowed back in the house. And I got fired from my dad’s pharmacy that day. So that was like one thing after the other. And by the way, it was like April of right when I was about to graduate pharmacy school. And so I was about to start a residency, I had two months left of pharmacy school, I still had to take my board exams. I had no job, I had not much money in a bank account, and I was living out of my car. And in that moment, like I said, I knew I was like, I can do this. I just had, I don’t know if it was God, if it was a strength, something within me, I just knew that I had made the right decision. And there had been so much bullying and abuse, and I was like, I’m done with this. So anyway, fast forward. And tell me when…

Tim Ulbrich  11:19

Yeah, good. I’ve got so many questions, but this is good. Finish your journey here. 

Dr. Christina Fontana  11:23

Yep. So So there’s so much more, you know, that was the beginning of my entrepreneurial journey really, was getting into that residency, because it really opened up my eyes to all of the different possibilities within pharmacy, and I, it was so stressful, I cried a lot, I had so much PTSD in my body now that I look back on it. But I don’t regret that decision of doing a residency because again, it opened up my eyes to like, I started teaching diabetes classes, I was going through Integrative Nutrition at the same time, and like healing my body of looking at the deeper root of disease and why people get sick. And so this journey led me to where I am now. And I don’t regret any single part of it, because it was so painful. But I turned that pain and alchemize did into why like the drive that I have now to help people. 

Tim Ulbrich  12:20

Yeah, as you’re is your sharing, and I really do appreciate your vulnerability here as I think that many people listening, you know, maybe will resonate with very specific parts of that, right, whether it’s, you know, an abuse part of the journey, or, you know, an eating disorder or some other trauma. But, you know, I think there’s pieces and parts of all of us that can relate to some part of that story. And what’s coming up for me is, like, where does that generative drive come from? Right? So when you think about all that you’ve been through, when you think about, you know, obviously the questions around am I loved? And you know, then being abandoned. And when you talk about your residency journey to me, you know, when I, when I think about, okay, you went through the scramble and I’m sure in your father’s eyes now that was a kind of a dagger of like, okay, now you’re choosing an option as the scramble, right? It’s like the last resort instead of this pathway, you know, seeing you would take and so my question is, where does that generative drive come from? Where do you attribute, you know, you choosing to go down that path? Right? So you know, I think in many abuse trauma situations, obviously, I’m not a counselor in any way, shape, or form, but you tend to think that often you see people stuck in those situations, because, you know, it’s, it’s harder to see the path out of it. And that becomes a new defined normal. And here, obviously, you talked about hitting that rock bottom in terms of, you know, getting thrown out of the house, and, you know, you chose choosing to go down this path anyways. And I almost felt as you were sharing, almost like this tug down an undefined path. And I’m curious of like, what is that pull? Like, what is that talk? What do you attribute to? Is that your is that your faith? Is that your “I just have this intuition”? Like, where, where does that come from?

Dr. Christina Fontana  14:09

I remember sitting on my bed one day meditating, because I like I said, I had so much anxiety from living in this house where I knew like my parents hate pretty much hated me, that my brother, and like, I guess I laugh to kind of cope with it now because I’m just like, I think back to how crazy it was. So please, like if you’re listening to this, please. No, I’m not. I laugh at my own situation, I guess because I’m just like, it was so crazy. But um, I remember sitting and meditating at the time because I was just trying anything to cope with this anxiety. And I felt this and I heard this voice so clearly say, “You like you need to get out of here.” Like, this needs, you need to leave. And so I guess I feel like that was really the first time that I felt that intuitive presence of God. You know, like I grew up Catholic, I kind of had a little bit of connection. But it wasn’t like, my dad was not a pastor or like, I didn’t really have that strong influence. But in those quiet moments, when I was with myself, my intuition started to speak. Because, you know, there’s so many fear influences that we have even now, with the news, people and expectations, parents, etc. So when you quiet that voice, and you really tune in, I started asking myself, like, what do I really want. And it was very scary, but it was that was that same feeling that I had back at the pharmacy. It was just this, it came from within, and it was just this boost of energy that I knew. It was, it was like, without a shadow of a doubt, I need to do this. And it was just, I think, too, probably the pain, like think about when someone has to make a decision, the pain was so bad, that I felt like I had to move. So like if you’re, if you’re in a bad relationship or a bad situation, eventually you get whittled down enough that it’s like, I’m done. That like F-it moment. So. 

Tim Ulbrich  16:12

And Christina, as you share, you know, you talked about several things like, you know, obviously, your your need for acceptance, and to be loved. You talked about your nervous system activation, you talked about, you know, your awareness of how emotions are being suppressed. You also talked about kind of the journey of not not condoning in any way, or you know, accepting any way the abuse, but understanding and having a perspective on that, as you now look back. Which all of those together, tell me you’ve been through a journey of inner work, of counseling, of i, if you wouldn’t mind, just sharing for a moment what that journey has looked like for you. Because I think for some that are listening that say, Oh, I’ve got a, you know, a part of my story, you know, that maybe I need to dig a little bit deeper, despite the pain, right, that can be there. And I just think the more that we can hear from others, and on some level, you know, normalize the work that needs to be done, you know, the healthier we can all be. So if you would mind sharing a little bit of, of your journey of processing some of the emotion and the pain that you went through? 

Dr. Christina Fontana  17:12

Yeah, absolutely. It it’s still a work in progress. Like there are I’m doing specifically nervous system work right now. But I had started off with traditional therapists, and that only got me so far. When I started doing the subconscious work, and I had hypnosis sessions, my anxiety went from like an eight to a two. And I started to say, okay, like, this is part of the breadcrumb trail of how I want to be helping people. So now that’s what I do. All of these tools that I’ve learned throughout the years, I now help people with. And someone I was I was working at a retreat one time, and somebody came up to me, they’re like, You should call it like rapid transformation, because people shift so quickly, because I, because I’m so intuitive. And I’ve developed that muscle so much within myself, I can look at someone and say, okay, and coach them and ask them these questions that are going to draw out of them. What needs to be shifted, because it’s all internal. Right? It’s the, it’s the layers, I call it multi dimensional healing. It’s the nervous system that’s holding the cellular memory of the trauma, it’s the patterns that you’ve come to cope with that trauma, people pleasing, perfectionism, overthinking, that’s all a nervous system response. So it’s the nervous system, all these patterns. And then there’s typically core wounds that are there like unworthiness, shame. And so that needs to be digested in order to allow that flow of emotion because, you know, I grew up in a very suppressive environment, and it doesn’t allow for you to tap into who you really are, the creativity, the gifts and that’s why I bring this work into helping entrepreneurs because if you’re suppressed, you’re not going to show up fully self expressed when you give a talk, when you go to put your message out there this work is so much of you know, the inner work, but also the practical strategy of how do I bring all of who I am to the table when I am speaking, so that I show up with power conviction. And that’s how you influence people because then they know you care, they see the passion that you have. And that’s how you start to create a domino effect of healing in the world. Which is really why I believe I’m here is at the root cause it’s to be a beacon of light for other people and that’s why I’m so vulnerable in my story. I’m like there’s nothing look in the crevices in the closet. There’s nothing in my closet like I will show you my husband because I want people to to know that they’re not alone and I want them to know there are tools out there that can help them. 

Tim Ulbrich  19:57

Yeah, I love how you described it as you know multi dimensional and the layers. You know, that’s been my own experience of just kind of slowly peeling back the onion and the layers. And I think as you do that. And I’m convinced it’s a lifelong journey. I don’t think the work ever ends. 

Dr. Christina Fontana  20:12

Yeah. 

Tim Ulbrich  20:13

But through that, you start to get a little bit closer, a little bit closer a little bit closer to who your authentic self is. Right. And that is that is the unique advantage of every one of us. There is one, Christina, there is one, Tim, you know, there’s one of whoever’s listening, and we’ve got an opportunity to really identify who is that? Who is that? And how can we help serve others. So with that in mind, let’s shift to talking more about your journey as an entrepreneur. And one of things you share on your website is that you, “Empower others to transform their lives, reveal their inner radiance and step into more energy, confidence and power.” So what what is the how behind that? Why? So how do you help people on that journey?

Dr. Christina Fontana  20:53

So it’s part of what we just talked about. So it’s that inner work. But it’s also the practical strategy of it. And now we’re going to talk about goal setting. So I’ll bring this up now. So structured flexibility, right. So like, if you think of a container, you need to have structure around something to hold the energy of it. So like, if I were to just say, I want to have a business, but there’s no structure or offer or clear place for somebody to land, then it’s kind of like having a leaky bucket. Yeah. So I look at, okay, let’s look at some of these patterns that you have that we can start shifting, as well as those practical strategies of how do we translate your gifts into gold. That’s one of my, like, my signature methodologies turn your gifts to gold, because again, I always show this this is like my new thing. I know that you everybody listening, I’ll describe what I’m holding up right now. So it is a diamond. And if you are following me on social media, you’ll see that I post about this, this is on my Instagram. This is who we are like I’m pregnant right now I’m 21 weeks pregnant, this child is going to come out pure, with all the gifts that it was born with. With it being brilliant, worthy, everything, its pristine. But then what happens is, over time, we learned that life isn’t safe, right in some way, whether it’s a trauma, or we get yelled at or punished, or whatever, whatever that might be. And little kids make meaning out of things. I’m bad. I’m unworthy, all of this. And so that’s what we’re carrying into our business. And people, it’s so unconscious, that that’s why we bring it to the conscious forefront and say, Hey, this is what’s showing up. So we can help you reveal more of that diamond, of the brilliance of who you came here to be. Because you’re most magnetic when you shine that light. And when you can help those people who are in your audience scrolling on Facebook, looking for the answers. That to me is true fulfillment. So the more that you can reveal that, and have these containers and by containers, I mean, like offers or the way that you tell your story in a way that’s compelling and draws people to you. That’s how you build a sustainable business. That’s, that’s my belief. Its just one perspective. 

Tim Ulbrich  23:24

Yeah, and I know you work with a lot of entrepreneurs, but for everyone listening, like this work is span spans everyone, right? So obviously, we’re talking about here and the framework of, you know, being able to approach your business and how you serve others and making sure that you know, what is unconscious becomes conscious, and we’re aware of how that might be limiting what we’re doing are holding us back. But, you know, for someone who’s at the front lines at a community pharmacy, or they’re a manager or administrator at a hospital, like, this work matters for everyone. It matters in your professional life and matters in your personal life. You know, you’re talking about some of the variables that as you know, kids growing up, we experienced these things, some of them might be a traumatic enough that we remember, but often they’re not. And I know that as a parent, like there are micro moments, I had one of them with my kids last night where, you know, after there’s an interaction, it’s like, oh, like, how was that perceived? How could that have been done differently? And now how can I, there’s mistakes are going to be made? That’s a part of life. But how do I learn from that? And how can I talk that out loud and process that with them as well? And they need to hear me out loud, say, like, I am sorry, you know, I shouldn’t have done X, Y, or Z. And I could have done this differently and they need to hear those things. And I don’t get it right a lot of the time! But this work matters as an employee, as an entrepreneur as a parent, as a spouse as a you know, father, mother, brothers it matters in every relationship that we have. And so I just love the vision of what you’re sharing one of these you have on your website, which really connected with me is you said “When we reconnect back to our true essence, remember who we really are we are limitless empowered, and we’re free.” 

Dr. Christina Fontana  25:03

Yep. 

Tim Ulbrich  25:03

So powerful, right. And that transcends so much of what we experienced every day if we’re able to get there. 

Dr. Christina Fontana  25:09

And I want to just really quickly talk about that, because that you hit on a really important point there with, you know, when when we have to cope with what’s not resolved within us, then it turns into, like, for me, it was, you know, drinking and numbing my emotions and staying busy and all of these coping mechanisms that disconnected me from myself. And so this process for me has been reconnecting back to my body, which, like, again, it’s uncomfortable. If you’ve experienced trauma, it’s so uncomfortable sometimes to go into that pain. And so oftentimes, people dissociate. And they’re like, how do I escape this? Like, can I just run away from this in any way possible vacations, whatever, whatever that coping mechanism is. But when you when you heal, that’s when you’re truly free. And I think that’s what a lot of people are seeking is through those mechanisms, like, I just feel better. 

Tim Ulbrich  26:06

So right, that’s right. Yeah. And I think for you know, I’ll speak to this for a moment, just because this has been my own journey. I know, when I was doing some of the work that I’m doing now, one of my initial knee jerk reactions was like, I had a great childhood, like, there is no trauma there. You know, number one, all of us have experienced something, the magnitude of it, the significance of it can be different. But there, we all have our own journey. And, you know, I think sometimes that we can confuse things like, you know, I was provided for effectively, you know, my parents helped support me, but there could be emotional gaps there, there could be emotional gaps, and you know, how things were communicated or not communicated. And this is not about, you know, digging up things that’s going to lead to, you know, judgment and, you know, disgruntment towards others, right, I think part of this journey, is to really have peace with that. But you know, so much of that, the more to your point, the more that we can help move from being unconscious to conscious, once we’re aware of it, you know, and once we can tap into our emotions and start to slow down and say, Okay, in this moment, I’m noticing myself feeling angry, I’m feeling fear, I’m feeling shame, I’m feeling guilt, whatever it be, and then connecting that with whatever interaction we’re having. I know what I often realize is whoa, like the emotional reaction, as real as it is, is way out of whack with the reality of the situation. Okay, Where’s that coming from? Like, why am I why am I feeling so much anxiety and fear over something that went, I can just step back and kind of untether you know, myself and sort of observe like, oh, Tim, that’s interesting. Like, your heart rates increased rapidly, you have shortness of breath, like you’re, you’re, you’re becoming really tense, like, what’s all that? About? What, what’s behind that? And those are, those are tools, those are things that we can use everyday in our interactions that we have with others. 

Dr. Christina Fontana  27:54

Right. Exactly. And the brain loves context, right? So like the nervous system feel safe, when we have some kind of context around, “oh okay, like, this is what’s happening.” Then you can use whatever tool to regulate and be with that part that is probably a past part of you. That’s like, hey, I need support, hey, I wasn’t supported in this way, or whatever it might be. So yeah. 

Tim Ulbrich  28:21

So one of the things I’ve shared before on this show and with others, as well, is that I feel like parenting and entrepreneurship, for me have exposed so many areas of weakness or opportunities for growth, however, we want to say it. 

Dr. Christina Fontana  28:37

Yeah!

Tim Ulbrich  28:38

And so many opportunities for self reflection that I’m not sure, you know, would have been there to the same degree without it right? When you’re when you’re talking about young kids, when you’re talking about business, there are things that stretch challenge, get out of your control, in a way like for me, I was very good at like keeping things in a box, and being able to kind of control and maneuver around it so that I didn’t have to experience the uncomfortable feelings and the things.  Well guess what? When kids come to the equation, when business come to the equation, like that box gets blown up, sometimes they really, like for me exposed like, oh, wow, like when I don’t have control of a situation. Like that’s where I see, you know, a lot of things go awry. And and that’s an interesting discovery, like, well, what’s behind that? And why why is that there? So my question for you is, you know, as you think about your journey, in business, or in tune to be as a parent, like, what have you learned about yourself? What has been the most significant one or two things that you’ve learned about yourself through not only your own journey of healing, but also through building and growing a business? 

Dr. Christina Fontana  29:36

Oh, my goodness, when I think of this analogy, when you have a business and you’re growing it, it’s like a mirror. Everything that needs to come up, that’s your client interactions, team interactions is going to come up like you said, I love that analogy. You’re like the box blows up because it’s like, you can’t hide. You’re facing off with yourself. And yeah, I would agree 100% with the control, like for me on worthiness came up control, people pleasing all of those protective parts that just wanted to keep, like, as a child, I just wanted to be safe. And I never felt safe in my house because it was so chaotic, there was a lot of abuse going on. And so I learned to shut down. And that was part of my coping mechanism, like I said, and I think, through control, and my, my dad was very, both my parents were very controlling. That’s what helped me feel like, oh, I have some sort of safety, right? So it was kind of that dynamic that still plays out. And I’m like, I have to catch myself. And I’m like, okay, and I again, like, that’s one of the layers for me that I have to continually work on. And that’s why I have continuous support coaches, different people that I hire, because I’m like, hey, I need, I need to be witnessed in this, I need to be held in this very uncomfortable situation. But at the same time, like even, you know, currently, like, in the past few months, I’ve had some situations where it really stretched me and I’ve never experienced this before. But from a higher perspective, I always come back to okay, what is God trying to teach me through this? Because my character is being strengthened through this. And so I feel the emotion, but then I also say, Okay, what am I actually learning here? And that, to me, is, is important for the integration process of like, I’m not just going through this to feel pain, I’m actually alkalizing something within myself from a past version, or whatever it is, that’s helping me become a higher version of myself, you know? 

Tim Ulbrich  31:48

Yeah. And I think that integration part of the journey is so important, right? There’s obviously the feeling of the emotions, and you know, being more aware of that, and how is that impacting, you know, the relationships and things that are happening each and every day? But then what’s the integration? You know, and sometimes that’s not in the moment thing, at least speaking for myself, sometimes that’s, you know, really leaning into the curiosity, as I’ve alluded to a couple different times, and then through that curiosity, and through that self awareness, and through kind of untethering yourself in that experience, it’s okay, what, what is the integration part of this? And what is there to be learned? And how can I grow? I think that how can I grow is a good transition and segue into setting big goals. We’re getting ready to come up on the New Year, which is a time that people often look at the mirror and say, Hey, what are some things that I want to focus on? What what has been the year that’s about to end? What what do we want to shift? And how do we want to grow into the new year? And before we talk about some of the strategy and X’s and O’s for how you approach goal setting, or how you approach this with your clients as well. I want to get just your general thoughts and recommendations on how you might help someone or encourage them to get in the right mindset before they get into the goal setting. Right, the work before the work, if you will. But yeah, I think so much of the goal setting exercise, I say this about the financial plan where we can work on X’s and O’s, we can develop a retirement plan, we can develop a debt repayment, we can do all these things. But if we’re not in the right mindset around, like, why do we care about this topic of money? What’s the goal? What’s our relationship with money, all of these bigger types of things, those X’s and O’s are only going to go so far. So I think similarly here on the goal setting, there’s this important step of getting in the right mindset under which we’re then thinking about how we set goals. So what are your What are your thoughts there? 

Dr. Christina Fontana  33:35

Yeah, so I think getting in the right nervous system state is even a deeper level, because when we’re in fight or flight, this prefrontal cortex is not active. So this is where our creative solutions come from, our strategic thinking, our critical thinking, and so I would always encourage and this I do this across the board with all of my clients, align the energy first. So looking at your nervous system, doing some of those exercises, but also really moving from, to what feels pleasure, like like moving from the mind of like, oh, like, How much money do I have whatever. Ask your heart and move into the body and say, What would feel really exciting for me? and I’m actually going to say this out loud because I want to, I want to commit to this. Even though I’m having a child next year, I saw somebody who had this he has a list. He’s really in a very ambitious in my audience, he’s not a pharmacist, but he was committed to speaking to 100 audiences in 2023. And he’s like at the bottom of the list. And I thought to myself, I want to do that I want to commit whether it’s through a Facebook live whatever it is Instagram speaking opportunity. I’m putting it out there. So I would love to have that as a goal so that for me feels juicy, alive. Pleasure lead, like yes! This is something about impact that I really want to move. And so from that vision, then you can obviously go into the more like practical planning pieces of it. But also, it’s like that structured flexibility, like not being too rigid, where it’s like the gripping, but allowing that co creative force of God, the universe, whatever you want to call it, like the surrender piece, because we can only control so much. Yeah. But when you when you embody that version of yourself, like tapping into the energy of this is what I want this is who would I have to be to achieve that goal? Because there’s usually an evolution or a next version of yourself, right? Maybe a higher version of yourself? What would that be? And feeling into that frequency? I recommend this to my clients to just even for five minutes, every single day, because, according to quantum physics, we’re always attracting based upon our thoughts and our electromagnetic signature from our heart. Yeah. So that’s what we attract. What we constantly think about what we’re constantly feeling. So yeah, that’s a whole other topic. 

Tim Ulbrich  36:13

It’s a good one, there’s a lot of good resources out there, you know, for for people that want to learn more about that as well. But I think, you know, what you shared about the pleasure lead really resonates with with me, right, because I think for a lot of pharmacists, you know, I’ll speak for myself, but I suspect many may feel the same as well. You know, high achiever tend to want to please others, you know, want to develop these, you know, goals that may have expectations tied to others, and really slowing down and getting out of our head getting into our bodies to really take the space and time to say, Does this resonate with me? Is this an expectation of someone else? Is this really authentic to me or not. And that really requires your point, getting in the right state of our nervous system. I’ve been in these exercises with my small group of men where we meet, we meet once a week for two hours, and we kick off our meeting, typically, with one of the men leading a 15-20 minute type of meditation exercise, and I can consistently now almost have gotten to the point where I will show up, and it feels like there’s an uneven distribution of weight of my head to my body. Because I’ve been throughout the day, I’m just programmed, like through, you know, repetition, experience, whatever, that if I’m not careful and don’t slow down, I’m like, I will live so much of the day in my head, that I can actually feel like the physical exhaustion of that in my head, and really, to be able to slow down and like get into my body. And typically, by the end of that meeting, like I can actually feel like the shift of the stress and the weight in my body. And I’ve actually described it to the guys my group that like it feels like if I close my eyes, sometimes it feels like my head is like in a giant space like disproportionately weighted to the rest of my body. But it’s just such a good reminder of like slowing down, like, what are the exercises, what are the habits, one of the behaviors can really get ourselves into checking in with our body. And I think aligning that with goal setting is so important, right? Because I think if we’re not careful, like Are these your goals? Are these someone else’s goals? And even if they’re your own derived goals, maybe not at an expectation of others, does it actually resonate with you? Right? So you gave that example, which I think is a really good one, because someone else might see that and say, oh, I want to do that too, but not because it really resonates. But because they’re like, Oh, that’d be cool to speak 100 times, like, that’d be cool, right? There could be some pride there, there could be some ego there, right? You know, but the way you described as like, that really resonated with you, internally, right, for whatever reason, I think it comes full circle to where you started your story, which was, you know, early in your life, identifying that you really have a desire to want to help other people, right, that, to me, ties very directly to that. So I think getting in the right state of mind, you know, getting out of our head, making sure that it’s a pleasure lead processes, is so important. Now, I want to get a little more detail from you on this concept of structured flexibility. Because this has been my experience where I’ve gone through goal setting in many different formats. And sometimes I come up with these very comprehensive, you know, plans that seem great, you get the dopamine rush, and then two weeks in, you’re like, oh, my gosh, this is exhausting. What was I thinking I’m going in 12 directions, I’ve got every domain of wellness of, you know, defined with five different sub goals. And then I’ve been on the other end where, you know, it’s too loose, it’s maybe not motivating enough or not structured enough. And I do think there’s a middle ground here, which, which I believe is what you’re referring to the structured flexibility. So tell us more about what that looks like for you. 

Dr. Christina Fontana  39:38

Yeah, I’ll just even given a concrete example of a launch. Like I just did a Pivot to Profit three days, you know, it’s a client converting workshop, like I bring everybody in, I teach them, you know, it’s like a really detailed PDF and I’m like, Okay, this is what I’m going to do. I’m going to do this three day event, deliver tons of value, and then I’m going to I’m share about one of my programs. As I’m going through the launch, I’m like, oh, I want to do a trick or treat giveaway. So that came in, like, being open to  the downloads that come through, like I call them downloads. It’s like that divine kind of intuition. And so I added that in, and maybe I took something out. It’s kind of like, like cooking. It’s like, oh, do I like my food spicy. Or maybe I won’t add so much of this, but I’ll add this. So I think it’s being a little bit flexible with number one, like those components, but also not being so rigid of like, I need five clients from this launch. Like, it’s it for me, it comes back to and you talks about that word, ego, I really try. And it’s a constant thing. I’m like, Okay, I’m releasing, I know that this is my ego talking right now, that’s wanting this…outcome, I’m going to let that go. And I’m going to open up to whatever the highest outcome is going to be. And I’m going to show up and serve and give 110% and do this plan. Be flexible, you know, implement those downloads, like I said, but also having that openness of, I wonder what else could show up, that it doesn’t have to be so rigid?

Tim Ulbrich  41:20

No, that makes sense. And I think that very concrete example you just gave, you know, related to the launches is a good one, right? Because I think so often, not only can we adopt other people’s goals, but we can set a goal. And then speaking for myself, I’m so structured and rigid to that goal, that I lose any of the openness and flexibility to you know, okay, might there be a different idea, a different pathway, or even feedback from audience or, you know, different things that are coming in that says, okay, my flexible enough to be able to pivot and move in real time. And usually, if I develop a plan, it’s like, this is the plan, right? We’re going with, and I’m gonna see it…. which there’s value in that, like, you know, and there’s, there’s real value that can come from kind of that, you know, stick-to-itiveness and wanting to see it through and being resilient, but also adding some flexibility to that. 

Dr. Christina Fontana  42:04

I’m laughing because I’m thinking like, that’s how I’m like, oh, like, I’m gonna plan…..with this baby and like, we’re gonna get the … and I’m like, I’m sure like, the my like, whatever is gonna blow up my plan, but that’s okay.

Tim Ulbrich  42:18

Well, this has been fantastic. And I’m so grateful for your contributions to our community, your vulnerability and sharing your story. I think many are going to find that inspiring, insightful, and maybe on some level, motivating to do some more self discovery and their journey. Also appreciate your your feedback that you gave on you know, how we can be thinking about setting goals and sharing about your entrepreneural journey. Where is the best place that our listeners can go, Christina, to learn more about your work and to follow your journey along the way as well? 

Dr. Christina Fontana  42:46

Yeah, so my website is pharmacistcoach.com. And then from there, you’ll find all of my social media handles my group Monetize your Magic. Everything like my Instagram is @thepharmacistcoach so I would love to connect and feel free like I literally am an open door. So if you want to share Hey, I loved what you said in the episode or if you have questions, please reach out I’m happy to support.

Tim Ulbrich  43:12

Awesome well, we will connect in the show notes to social media, to the website pharmacistcoach.com, as well as your email [email protected] If people want to reach out directly.So, Christina, thank you so much for coming on the show and wishing you an awesome 2024.

Tim Ulbrich  43:27

As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published.  Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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YFP 337: Key Real Estate Trends for Homebuyers in 2024 with Tony Umholtz

Posted on by YFP Media

Join Tony Umholtz from First Horizon Bank as he forecasts 2024 housing market trends and offers expert insights. Sponsored by First Horizon Bank.

Episode Summary

With inflationary pressures historically high and inventory tight, many people are feeling understandably nervous about the housing market as 2023 comes to a close. But what can homeowners and homebuyers expect in 2024? To help us answer this question, we are joined once again by Tony Umholtz, a mortgage loan officer with First Horizon Bank. In this episode, we tap into Tony’s 20-plus years of experience in the industry to get his input on current trends in the housing market, what makes this cycle different from 2008-2009, the correlation between presidential election years and interest rates, and what prospective homebuyers should be doing right now to get ready to buy a home in the new year, plus so much more! For a comprehensive overview of the key market trends that pharmacists and healthcare professionals need to consider when buying a home, be sure to tune in today. Episode sponsored by First Horizon Bank.

About Today’s Guest

Tony Umholtz graduated Cum Laude from the University of South Florida with a B.S. in Finance from the Muma College of Business. He then went on to complete his MBA. While at USF, Tony was part of the inaugural football team in 1997. He earned both Academic and AP All-American Honors during his collegiate career. After college, Tony had the opportunity to sign contracts with several NFL teams including the Tennessee Titans, New York Giants, and the New England Patriots. Being active in the community is also important to Tony. He has served or serves as a board member for several charitable and non-profit organizations including board member for the Salvation Army, FCA Tampa Bay, and the USF National Alumni Association. Having orchestrated over $1.1 billion in lending volume during his career, Tony has consistently been ranked as one of the top mortgage loan officers in the industry by the Scotsman’s Guide, Mortgage Executive magazine, and Mortgage Originator magazine.

Key Points From the Episode

  • Key market trends for pharmacists and healthcare professionals looking to buy a home.
  • How this cycle differs from the global economic crisis of 2008.
  • A reminder to maintain perspective when it comes to affordability in today’s market.
  • Why you shouldn’t necessarily wait for interest rates to fall before you buy.
  • Some of the ways that the presidential election might affect mortgage rates.
  • Tony’s take on the consolidation of lenders and what trends to expect going forward.
  • Getting on strong financial footing and other tips for preparing to buy a home in 2024.
  • What you need to know about the National Association of Realtors (NAR) commissions ruling.
  • Recommendations for getting your pre-approval process started.
  • Insight into the First Horizon Pharmacist Home Loan.

Episode Highlights

“Every market is different, every challenge is different.” — Tony Umholtz [0:07:43]

“Don’t just buy to buy – Buy if you find a home that suits your family and your needs.” — Tony Umholtz [0:13:57]

“Making sure that, overall, you’re on strong footing financially – is the right thing to do.” — Tony Umholtz [0:23:42]

“Your timeline depends on when you’re looking. If it’s in the summer, May, or June, then maybe you wait until after the new year to get an actual pre-approval. But it’s never too early in my opinion.” — Tony Umholtz [0:29:02]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00] TU: Hey, everybody. Tim Ulbrich here, and thank you for listening to the YFP Podcast, where each week we strive to inspire and encourage you on your path towards achieving financial freedom. 

This week, I welcome back onto the show, Tony Umholtz, a mortgage loan officer with First Horizon Bank. During the show, I tap into Tony’s 20-plus years of experience in the industry to get his input on current trends in the housing market, what makes this cycle different than 2008/2009, his take on the connection between presidential election years and interest rates, and what prospective homebuyers can be doing right now to get ready for buying a home in 2024.

Okay. Let’s hear from today’s sponsor, First Horizon, and then we’ll jump into my interview with Tony Umholtz.

[SPONSOR MESSAGE]

[0:00:41] TU: Does saving 20% for a down payment on a home feel like an uphill battle? It’s no secret that pharmacists have a lot of competing financial priorities, including high student loan debt, meaning that saving 20% for a down payment on a home may take years. We’ve been on a hunt for a solution for pharmacists that are ready to purchase a home loan with a lower down payment and are happy to have found that option with First Horizon.

First Horizon offers a professional home loan option aka doctor or pharmacist home loan that requires a 3% down payment for a single-family home, or townhome for first-time home buyers, has no PMI and offers a 30-year fixed rate mortgage on home loans up to $726,200. The pharmacist home loan is available in all states, except Alaska and Hawaii, and can be used to purchase condos as well. However, rates may be higher and a condo review has to be completed.

To check out the requirements for First Horizon’s pharmacist home loan and to start the pre-approval process, visit yourfinancialpharmacist.com/home-loan. Again, that’s yourfinancialpharmacist.com/home-loan.

[EPISODE]

[0:01:52] TU: Tony, welcome back to the show.

[0:01:55] ToU: Hey, thanks for having me, Tim. Good to be here.

[0:01:58] TU: Excited for this conversation. We’re going to pick your brain, tap into your expertise, Tony, on what you’re seeing in terms of current market trends. We’ll talk about what may be ahead in 2024, especially for those that are making the decision or want to make the decision to buy a home early in 2024. And then we’ll wrap up by talking about the pharmacist home loan option as one option that pharmacists may consider as they’re looking at some lending solutions for buying a home. 

Let’s talk about current market trends. I think every time we’ve talked on the show in the last year or two, we’ve said something along the lines of, hey, this is a crazy market. This is a weird market. Here we are, end of ’23, it seems like interest rates are starting to stabilize a little bit. But we’re heading into a new year, obviously, market volatility. We’re going into a presidential election year.

What are you seeing right now, Tony, as your boots on the ground working with many other pharmacists and healthcare professionals that are looking to buy a home?

[0:02:53] ToU: It truly is a unique year in a lot of ways. I know we’ve said that before. The one thing about the mortgage industry and the real estate industry is ever-changing. It’s constantly changing, and you’ve got to constantly adapt in our industry. It’s constantly evolving. Some things that are just truly unique right now is obviously interest rates, how quickly they’ve risen. I think it’s the fastest they’ve risen since the 70s. They definitely are meeting some resistance now. It’s not to say they can’t keep climbing higher, but we’ve seen a little bit of a pullback here recently, primarily based on the consumer price index numbers, which have been slowly coming down.

We’re getting to that threshold where lenders, like in the lending world, when we look to sell a loan to Fannie Freddie, or to some dealer, or investor, they don’t see rates going any higher. So they’re not paying a premium for higher coupons, which are rates. You can kind of see that we’re kind of getting towards the top here, but it’s just a truly unique time. 

I think there’s other headwinds here. I don’t want to dive too deep yet, but we’ve got to be careful because we may not be out of the woods. I mean, the fiscal stability of the US is another thing we really have to watch, because bonds could be priced, government debt and rates could really be priced based on the solvency of the US government and the debt ceiling. Getting through these debt ceilings and the debt ballooning like it is could be a pressure on rates in the future.

[0:04:22] TU: Yes. One of the things I love, Tony, about your perspective when you come on the show is, just giving us some of the macroeconomic considerations of what’s happening. There’s what we know now, and then there’s what may or may not happen in the future.

One of the things I wanted to ask you about is, knowing the experience you have 20 plus years in the industry, knowing you’ve lived through some of the cycles that we’ve seen,’08, ’09 is the one that kind of jumps out to me that that was a very challenging season for many. Obviously, we saw the impact on real estate, we saw the impact in terms of foreclosures that happened in that period. What makes this cycle different than what you saw back in ’08, ’09?

[0:05:02] ToU: In ’08, ’09, it was such a challenging time, and I got into the business right after the 9/11 pullbacks, was a little bit of a recession there too. But the ’08, ’09 was just devastating, especially in the southeast, in Florida where I’m located. We saw some property values get cut in half. But the dynamics were completely different than they are today. We had an oversupply, overbuilding of homes. We had mass speculation. In the run-up to that, you had clients that could get as many mortgages as they wanted based upon a credit score. There was no fundamentals, there wasn’t a debt-to-income ratio.

There was mass speculation, people building homes based on credit, may not have had even down payments. So it was just it was completely a bubble driven by both speculation and easy money, right? When ’08 and ’09 came, and the crash came, we still were very busy. There was a lot of inventory. Now, granted, a lot of the transactions were short sales. Lots of people wanted to refinance because rates started falling into recession. But the challenge was that a lot of folks would have to come to the table with money to refinance because the loan-to-values didn’t change. The market corrected like that. The government came in and put different policies in place. But it was amazing how the market corrected. Investors would not buy certain things. It happened very, very quickly. 

Then, of course, the regulations stepped up. The regulations that were put in place post ’08 and ’09 have really helped make – now, it made lending very tough, and buying a home very difficult, but it’s loosened some since then, but not a lot. So you still have to show a very tight debt-to-income ratio, credit scores are important. All these things are important in buying a home. So it’s made the credit side of the housing market much more healthy.

Now, we basically had from 2010, to 2020, and even 2021, we were underbuilt as a nation, like our population was growing. But we weren’t building enough homes to keep up with that. I mean, so many builders went out of business in that timeframe. I knew really good builders who pretty much – who had been in business for decades before that pretty much shut down for a number of years before they reemerged. We were underbuilt all those years.

Now, we’re in a situation where we don’t have enough inventory, right? We have more demand for housing. This crisis is different in a lot of ways. It’s more of an interest rate-driven crisis, right? It’s driven by interest rates being high and not enough inventory. Those are the two issues we run into today. Every market is different, every challenge is different. That past cycle, in ’08 and ’09, was just a rational exuberance in lending, and then in construction, it was crazy. Everyone was just building to build, there were investors lined up.

I remember clients coming to me, Tim, saying, “I just got my name picked in the lottery,” and basically, all they were going to do is flip that house. They were going to put their number in, and they were going to flip the house when it was done. I can’t count how many of them did that. There was so many of them who did that. A lot of them got burned at the end. They got in there, the home finally was built. Then the property values fell. Now, they did come back over time. Now, we’re in a situation where we just don’t have enough inventory, and that’s the biggest challenge now, and the affordability with rates being high, and the combination –

[0:08:39] TU: I was just thinking about affordability, Tony, as you were talking. Thinking about many of our listeners, especially those that are on the front end of the career, maybe first-time homebuyers, it’s a totally different world out there than when I graduated in 2008. I think about today’s graduates. We now have student loans that are turned back on after a three-plus-year freeze on interest rates and payments. If they have other fixed expenses, like car notes and payments, obviously, interest rates have gone up. Now, we look at what’s happening in mortgage rates. Not just on the interest rate, but also in terms of the home prices and appreciation.

What you could buy if you think about in terms of a monthly payment, which is what a lot of people are looking at in the context of the budget, what you could buy three, four, or five years ago, very different, in terms of what you can buy today, and especially when you factor in not only is the monthly payment only going to go so far but obviously, home prices have gone up in that period as well.

What I’m hearing a lot of anecdotally, Tony is, people that are looking at their interest rate and saying, “Whether it was those that were first-time homebuyers or last decade that maybe they thought this was their starter home, and now they’re looking at, and saying, “I ain’t moving. I’m not trading my 3% rate for an 8% rate.” So they’re kind of staying in the home longer, maybe they’re spending more of their money on remodeling the home, and doing other projects, or spending it elsewhere, instead of moving.

Then, those that maybe are in that phase where they’re nearing retirement, maybe thinking about downsizing, going from a two-story to a one-story home, and they’re looking at the same thing. If we don’t have to, can we wait so that we don’t trade our 3% rate for an 8% rate? I think that’s obviously furthering the issues around supply.

[0:10:21] ToU: Absolutely. Absolutely. There’s no doubt about it. There’s a lot of pent-up demand. I mean, we all feel it. Families are growing. There’s more additions to the family. Even extended family moving in. All these things are happening now, Tim, and it’s pent up. In talking to a couple veteran real estate agents that I know, that had been in the industry 20 plus years, their thoughts to me were – you can get a better deal on a house right now. Yes, it’s expensive, but you’re going to get a much better deal on a home right now in the current climate. And most people see rates coming down in the future when refinancing and affordability comes back.

Definitely a very, very challenging time, obviously. I mean, the one thing that I would say, I don’t want to discredit the student loans and everything that’s going on. But just looking back at the ’08, ’09, 2010 crisis, the job market was not nearly as healthy as it is now. We all have to remember that. We look back at history, and we think we may have it so tough. But I always look back, and my gosh, my dad had it way tougher than me. When my grandfather was alive, and I’d speak to him about what he went through, his perspective hit home, working three jobs. All the things he did, it was just a different time. Yes, things were cheaper, but wages weren’t where they were, and opportunities weren’t where they were.

We look back and I look at ’08, ’09, and the job market was not near as healthy as it is today. So there’s much more opportunity for people right now. It’s an overabundance of opportunity to be employed, but the costs are higher. Part of that’s inflationary, part of that was – we don’t want to get into all the details, but there certainly is an issue with the cost. I do think you’ll see slowly the rates come back to normal. Rates should not be this high. They should be – it should be 5% to 6% on a 30-year. that’s probably where they should be. That changes a lot of numbers in the sevens. I mean, it changes things quickly.

[0:12:29] TU: Let’s talk about that for a moment, Tony, because you said something earlier about pent-up demand. And when you’re talking about 5%, 6% rates, if, which is a big if, but if we see that transition happening, that pent-up demand, there’s going to be an explosion of buyers into the market, which further challenges the supply and demand issue. I think, as we were talking offline before we hit record, I think the tendency, especially of a first-time homebuyer in this type of market is to say, wait, and I want to wait for prices to come down. I want to wait for interest rates to come down.

Obviously, someone’s got to be ready to buy. We don’t want someone to go down that pathway before they’re financially ready. However, does that potential waiting mean there’s more people that are flooding into the space? So maybe rates do come down, but now, you’ve got more competition in the market, and you pay more for the home. I think there’s an interesting balance here, and I just want to get your thoughts on, might there be a place to buy now, and even if rates come down, then there’s an opportunity maybe to refinance in the future?

[0:13:29] ToU: Well, I think that’s exactly what I’m hearing from some of the real estate agents that I know, is that, as soon as – I mean, they all have a lot of buyers that are on the sidelines that they represent. They sense it. As soon as rates come down to a little bit more meaningful level, they’re all going to want to come back in. What does that do? This creates a lot of competition. In the areas where you’ve seen a little bit of a buildup in listings, it’s a good opportunity to get a much better deal on the home.

I will say this though, you don’t just buy to buy. You buy if you find a home that suits your family and your needs. I always say if you’re going to be in a city for five years, it makes sense to buy. It always makes sense to buy versus rent. But if you’re only going to be there for a transitory period, then it probably doesn’t make sense. You want to just continue to rent, but rental costs are likely not falling much if at all, probably will go the other way. The cost of renting versus owning over time will be more.

I would just say, just from what’s been shared with me is, it’s going to get a lot more competition quickly if you wait. I do think we’ll see rates fall. I don’t know how quickly or when, but you can just see it. You can kind of already see it in the market. I don’t want to call it, Tom, but I told a couple of my friends that are CFAs, which are certified financial analysts. I said, “Watch, the 5% on the 10-year treasury will be likely be a peak. So far I’m right. I don’t know [inaudible 0:14:55]. They go, “No, it’s not, Tony. It may not be. This and that.” One of them said, “You might be right, because they’ve rallied down. [Inaudible 0:15:03] now.”

I think, the economy can only take so much, and I think, that’s the issue. I think we’re getting to that point. If you can afford it now, you’ll get a better deal if it’s the right home. I think you’re going to be able to lower the cost of ownership later, I really do. 

[0:15:23] TU: One thing I want I want to get your perspective on is, I’m already seeing rumblings out there on social media and the news about the connection between a presidential election year and what historically has happened in the economy here. We’re talking more specifically around mortgage interest rates. Again, disclaimer, we’re not trying to predict what may or may not happen, but I do think it’s just an important piece of information as we head into 2024, which is a presidential election year. Give us your insights, Tony, of what you’ve seen in previous election cycles.

[0:15:52] ToU: You can’t go in saying it’s going to happen, that rates are going to happen. There’s a couple things that I’ve seen, and nothing’s a guarantee, but it’s typically a rocky year for the stock market in an election cycle. Stocks are usually volatile, typically, on the downside.

[0:16:09] TU: In case, we haven’t had enough of that, lately, right? 

[0:16:12] ToU: Yes, right. We haven’t had enough of that. But crazy enough, the S&P is up this year, primarily because of big tech names. If you equal-weighted the S&P, it’s not doing well. But on a relative basis, it’s up because of those big tech names. But, typically, the stock market does not do well in an election year. What does that mean? That means, bonds usually rally, because money flows. Although we’ve seen bonds and stocks more correlated than ever this year. But typically, that’s what it represents.

The other piece is just the uncertainty, people rally to bonds. There are some people that say, I don’t necessarily believe this, but they say, “Hey, there’s political pressure by the incumbent party to keep getting rates to come down.” I don’t necessarily believe that, but some do. Typically, you will find that rates will normalize or get a little better in an election year, on average. If you go back through history, it typically does. I don’t think we’re going to see a huge rally, but we could. I mean, it’s interesting, UBS, some of the big brokerage firms are actually calling for – I think UBS calls for 275 basis points and Fed cuts by next fall. That’s huge. I would never predict that.

I think Morgan, Stanley, and Goldman are calling for maybe not that high, but close. So my personal feelings are, the Fed is going to wait till the job’s done. I just think they’re going to do it. They’re going to stick by their mandate and make sure inflation gets down, and it’s going in the right direction. The last report was 3.2%. I think that continues. Then, the other thing is economic decline. We’ve just got to watch the job market, the health of the economy. Walmart had some comments this morning in their earnings, and the stock was really getting hit. It’s around consumer spending. If we start seeing these things decline, that’s going to be a deflationary signal, and that will cause rates to decline. 

[0:18:08] TU: Yes. The last thing I wanted to get your insights on as we’re talking about current market trends here, and something you brought up in our discussion as we’re preparing for this episode is, what you’re seeing out there in terms of consolidation of lenders. Which makes sense. It’s been a challenging market. It’s been a challenging period. Is this a space where kind of the top are getting stronger, and the weaker are falling out? But I think that’s important to discuss, as people are making the decision of who they’re working with as a lender. Just to understand what the landscape is and what’s going on right now.

Give us a quick recap of what you’re seeing of consolidation of lenders, and what trends we may expect going into the new year.

[0:18:47] ToU: Yes, sure. I mean, just to be very transparent on the mortgage industry, it’s a very, very low-margin business. At the end of the day, it’s a huge transaction for individuals. But with all the costs involved in origination, and the way the secondary markets, and the hedging work, it’s a super low margin business. It really is one that has to be done on volume and units. A lot of lenders are really struggling right now.

Most lenders that have what’s called a servicing book, that means they’re servicing loans, that can show some profitability. I will say, even some really big lenders are in jeopardy right now, like really big names, possibly even publicly traded. It’s not an easy industry with these margins. A lot of consolidation is going on in the independent mortgage bank. I don’t want to get too technical for the audience, but I just think it’s always good to be as transparent as possible. So independent mortgage banks are non-bank originators. There’s been a lot of consolidation in those groups. They’re acquiring the ones, and sometimes it’s fire sale because they’re losing so much money, that they’re just being gobbled up for their assets, and their technology, and their people, basically. More or less their people. You’re seeing a lot of that right now.

I think it’s going to get worse over the next 60 days, though. It’s going to get real magnified here. I’m hearing about it. There’s some wholesale lenders that are closing up access, but that’s more for the broker community. So if you’re a mortgage broker, and you’ve got a couple lenders you broker to, you’re seeing more wholesalers go wholesale side, lenders that are pulling out of the business. I noticed that a big one was pulling out, they won’t take applications after December 6th. Some of that stuff’s happening, and it can affect people. I mean, I’ve had people tell me in past cycles that, “The funding stopped. My loan was approved, and now they don’t have a loan.” I wouldn’t frighten a lot of folks. I think most lenders are going to be okay, but there are going to be some that don’t make it.

It’s just hard to predict, because the originators themselves don’t know really what’s going on. Like I said, it’s such a low-margin business that the folks operating it, running it don’t always share with their salesforce what’s happening. But I think you will see continued consolidation, and probably some big names that maybe merged to hide the failure. That’s usually what happens. Oh, these two are merging. Well, there’s a reason why they’re merging. It’s going to be – unfortunately, it’s been a tough time.

[0:21:18] TU: With that uplifting message about the current market trends and where we’re at, let’s shift gears and talk about how someone can get themselves ready to buy a home in 2024. Obviously, thinking about the spring season. If we do see those rate reductions, we’re talking about, obviously, the pent-up demand coming into play. I think it’s something I know, Tony, we’ve talked about this on the show, but just from my own personal experience. We often think this is a longer-term decision, and then it just starts going really quickly. I mean, just human behavior is – especially for first-time homebuyer, wanting to get a home, and I’m going to have all my ducks in a row, and we’re going to do this in March or April 2024. 

Then all of a sudden, you get on to Zillow, you get into Redfin, you drive by some properties. Next day, you’re talking to a lender, you’re working with a realtor, and all of a sudden, you’ve got an offer. That’s it. These things can move quicker. I think anything that folks can be doing to prepare, and put themselves in a good position to come with a competitive offer, to have a strong lending application. This is the time as we wrap up 2023 to be thinking about that.

From your perspective as a mortgage loan officer, what are some of those key things that individuals should be listening for, especially the first-time homebuyer who maybe hasn’t gone through this process to make sure that they’ve got a good financial house in order as they look at seriously purchasing a home?

[0:22:40] ToU: Sure. I mean, I think the first thing, just make sure you have margin in your life. What I mean by that is, how much are you paying in debts? What’s your income coming in every month? Create that margin, your budget. What do I want to spend on housing, and this property. I think creating that is important. Obviously, paying debts down, keeping your liabilities to a minimum is important. The other thing is just looking at your credit score, making sure your credit score is where you need to be. I think, for a lot of folks, especially first-time homebuyers, it’s the revolving credit. It’s the credit cards, and that balance on their credit card compared to their utilization.

If they have a $10,000 cap on their spending, $10,000 limit, and they run it up to $9,000, that’s going to hurt their credit score. Keeping that down, that ratio down at 50% or below, I find is the best. So if you can keep it down there, that’s going to help your credit score. Just making sure overall, you’re on strong footing financially, I think is the right thing to do. Having some savings for a downpayment if you choose to. We’re obviously going to provide the best we would in any lender, most lenders should, would provide clarity as to the best options for you as an individual, whether it’s a low downpayment option, or one with more down payments. You’ve got to think through that. Do I want to have 20% to put down or 3%? Am I eligible for 3%? 

Savings is important, start creating that savings, that savings piece. You have to have enough foreclosing costs as well. There could be, depending on the timing of this and what state you’re in, and I don’t want to touch on this too much now, because it’s very much preliminary. But there was a big ruling on real estate commissions through the NAR.

[0:24:31] TU: I just saw that.

[0:24:32] ToU: It could change – I don’t want to get to, because it could be some back and forth with this.

[0:24:38] TU: Supreme Court decision, right, that happens?

[0:24:40] ToU: Yes, that’s right. But I think two states have already accepted it. I think Missouri and New York I think are implementing it. We’ve just got to watch how buyer commissions are impacted. I think, overall, it’s going to bring – I mean, my opinion, if this goes through, I think it’s going to bring the costs of commissions down tremendously for the end user. Selling a home will be cheaper than it’s been in the past. But my concern is, under representation of buyers, because they’re going to be going straight to the listing agent. They’re not going to understand the schools, the area, and they’re not going to have the representation. That’s my concern.

I also think it’s going to cut maybe 30% of the realtors out of the business immediately. So it’s going to be huge changes in that portion. I think ultimately, it’ll save people money, but it could underrepresent and provide less service to people. So that could create an additional expense for some buyers in some areas. They may have to pay their agent something. That’s typically coming out of the sales price now.

[0:25:49] TU: Tony, for those that have not been following the details of this decision, we’re talking about more in the podcast in the future. But I think what you’re saying is a really important point about potentially the underrepresentation of buyers as this shakes out. Just explain more about why that may happen. 

[0:26:04] ToU: Well, if the real estate industry adapts where you have to basically pay a buyer’s agent to represent you directly, it might be tough for a lot of people to do that. Even though you’re ultimately going to save the money on the home purchase because the seller doesn’t have to pay 6%, they’re paying 3%, you’re basically paying whatever portion, difference. I don’t know what it’s going to be in that area. But let’s say it’s 3%. So if you’re paying 3%, seems like a lot. A $200,000 our home, it’s $6,000. So if you’re coming out of pocket with that, that’s additional expense. Sure there’s maybe a way we can roll it into the price somehow. Seller concessions, things like that, but there’s additional costs. 

I think a lot of people will say, “I don’t need that. I’m going to go right to – I found this home on Redfin, or I found it on Zillow, I found it online. I’m going to go right to this house.”

[0:26:54] TU: The seller, yes.

[0:26:56] ToU: Well, the seller’s agent, listing agent represents the seller. So they may not give you all the details on the area, the property. Is it the right school system for your kids? Is it the right area? I mean, I just think there’s going to be an underrepresentation for some buyers in certain areas if they don’t engage that buyer’s agent. Just over the years, that’s what I’ve seen the value, is those agents do provide clarity and help on what’s the best area. I mean, if there is value there, and I think, some people may give that up. That’s the concern I have when initially reading through the ruling.

[0:27:31] TU: Great insights. Again, that’s evolving as a story, and new news to me. I hadn’t heard about the couple of states that already adopted it. We’ll keep an eye on this to make sure we’re sharing information as we have it.

Last thing I want to ask you here, Tony, about getting yourself, someone getting themselves ready for 2024 would be about the pre-approval process. If I’m listening to this, and it’s end of 2023, and I’m thinking about buying a home, let’s say in March, April, sometime in the spring. What recommendations would you have in terms of when they should be thinking about starting that pre-approval process?

[0:28:04] ToU: Well, I think just what we touched on earlier, Tim, about making sure your margins and your budget, starting to plan now. For some people, it might make sense to actually engage a lender now, just because if it’s – if you’re talking about closing in March, April, or May, it’s coming faster than you think because you’re going to start looking at homes. You want to know you’re eligible for these houses. The other thing is, you may want to be under contract for 60 days. One thing I’ve always said, if someone has their house listed during the holidays, they are a serious seller. They want to sell that house. They’re having people through the house with your family, and ornaments up, and all that, you know they’re serious, and they’ll probably negotiate more. 

It can be a good time to pick up a deal usually, versus the spring when there’s more people. But let’s just say, you’re waiting, and you may want to get pre-approved now if you go under contract in January or in sometime in February, and it’s a 60-day close or 45-day close. Your timeline I think depends on when you’re looking. If it’s in the summer, or May, or June, then maybe you wait until after the new year to get an actual pre-approval. But it’s never too early in my opinion, especially if you might have a credit issue because lenders have ways to like – we have a system where we can run simulations of what their credit could be. They pay certain things off. That’s been really valuable, not only in getting people approved, but also getting the better interest rates and better programs, getting someone from maybe 660 credit score to a 700, or 700 to 740. It adds a lot of value and I think it can take some time. That’s where I think pre-approvals are important to get ahead of it.

[0:29:49] TU: Let’s wrap up here by talking about the importance of knowing your lending options. Specifically, I want to talk about the pharmacist’s home loan product that you all offer at First Horizon. We talked about on a previous episode, 285, which was cracking the code on homebuying loan options. We’ll link to that in the show notes. We covered the variety of options that are out there from FHA, to VA, to conventional, to the pharmacist home loan.

One of things you already said, I think it’s really important point to reiterate, which is, when working with a lender, ideally, they’re helping you kind of understand what those different options are. To see based on interest rates, based on your credit score, based on cash available, what’s the loan option that makes the most sense for you? It might be for some, it’s an FHA loan, and they’re not thinking that that would be the best option. Or it might be a conventional, or perhaps it is the pharmacist home loan products. 

Tell us about that offering through First Horizon. I think many people, if this is new terminology, they might have heard of doctor loans that are out there. Many of those lenders may exclude pharmacists or they might be available in certain states. One of the reasons we’ve been partnering with you guys for four-plus years now is the national reach. We know we’ve got a national audience that’s out there. Who is this product for, and what is the makeup of the product?

[0:31:05] ToU: Sure. The product that we offer to pharmacists, of course, you have to be a practicing pharmacist. You have to have to be in the field, and be actively working in the field to be eligible. The program really is not just for first-time homebuyers. This could be your third or fourth home. It just changes with the downpayment. If you’re a first-time homebuyer, I know we’ve discussed this in the past, but I’ll repeat it. It’s 3% down if you’re a first-time homebuyer. It’s 5% down if you’ve owned a home in the past, so those would be the two differences. There is no mortgage insurance. That’s a really big benefit. We really do not have a reserve requirement either, which is fairly significant as well.

There’s a minimum credit score of 700 on the product. Obviously, the advantages are not putting a lot of money down into the house, and having no MI I think is the big advantage. We’ve had a lot of folks who, especially over the last four years, who have taken advantage of this loan and put 3% or 5% down. Obviously, the values of homes have gone up, and they’ve really been able to get great investment in your money, get great return on their money. It’s been a really good program. But like we mentioned earlier about the market constantly changing, and the mortgage market evolving. 

The secondary market, and how things have worked with trading, it was interesting. For some clients, their credit scores may not be really, really high, but it’s still good enough for the pharmacist product. Sometimes FHA loans have been unbelievably good, like the margin was so much better on the 30-year fixed pricing. We’ve been able to offer that. That wasn’t the case two years ago or a year ago.

We try to just look at what the market is offering us because sometimes, these other programs can be better if the rate is significantly lower. Anyway, that would be how we look at things. Obviously, the pharmacist products, the first thing we look at, if you’re a pharmacist, it’s the first thing we’re going to look at, but we will compare. Everyone’s situation is unique, and that’s why we will look at other options too. There’s plenty of other options that we carry.

[0:33:13] TU: The maximum loan amount on that right now is what, Tony?

[0:33:17] ToU: It’s 726,200, but I believe I’m about 90% certain, after Thanksgiving, traditionally this will come through. But I think we’ll be at 750 or a little higher by next year. I’m pretty sure it will happen. That’ll be the max loan amount. That’s the max the loan amount you can go to.

[0:33:34] TU: We’ll wait to update the website, so we’ll leave it.

[0:33:37] ToU: Yes, I would wait. If you think about that, someone’s looking to buy next year, potentially, you could buy $800,000 home with $50,000 down or less. That’s pretty good with no MI. That’s going to be on the table here pretty soon, I think.

[0:33:54] TU: So just to recap the highlights and we’ve got more information on the website, if you go to, yourfinancialpharmacist.com/home-loan. We’ll link to that in the show notes as well. You can see all this information and some additional resources. But 3% down for first-time homebuyers, 5% down if it’s not a first-time homebuyer, no mortgage insurance, 30-year fixed rate option, maximum loan amount of 726,200, potentially going up, and a minimum credit score of 700, available nationwide except in Alaska and Hawaii. 

Great option for folks be considering. Again, the point you’re making is such a good one that, when working with a lender, you want to feel confident that they are looking at all the options that are out there. You’ve highlighted well that that can change, will change based on what’s happening in the economy and with the different products that are available.

Tony, as always this has been awesome. Really appreciate your insights for our community. If folks want to get connected with you and again, learn more about that offering, yourfinancialpharmacist.com/home-loan. You can click on Get Started, that will provide a quick questionnaire, and that will get you in touch with Tony and his team. So Tony, thanks so much.

[0:35:06] ToU: Thanks, Tim. It’s great being here with you.

[0:35:09] TU: Absolutely. Happy Thanksgiving. Take care.

[0:35:11] ToU: You too.

[END OF EPISODE]

[0:35:12] TU: Before we wrap up today’s show, I want to again thank this week’s sponsor of the Your Financial Pharmacists Podcast, First Horizon. We’re glad to have found a solution for pharmacists that are unable to save 20% for a down payment on a home. A lot of pharmacists in the YFP community have taken advantage of First Horizon’s pharmacist home loan, which requires a 3% down payment for a single-family home, or townhome for first-time home buyers and has no PMI on a 30-year fixed-rate mortgage.

To learn more about the requirements for First Horizon’s pharmacist home loan and to get started with the pre-approval process, you can visit yourfinancialpharmacist.com/home-loan. Again, that’s yourfinancialpharmacist.com/home-loan.

[DISCLAIMER]

[0:35:56] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information on the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment, or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

Furthermore, the information contained in our archive, newsletters, blog posts, and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist, unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward-looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward-looking statements.

For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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YFP 336: Rx Career Forecast: Analyzing Pharmacy Job Trends w/ Alex Barker of The Happy PharmD

Posted on by Tim U

Alex Barker, CEO and Founder of The Happy PharmD returns to break down trends in the pharmacy job market.

Episode Summary

In this episode, we welcome back Alex Barker, PharmD, Founder and CEO of The Happy PharmD. Alex shares an update on trends in the pharmacy job market, including his outlook on the trajectory of the profession, projecting into the landscape of 2024 and beyond. He shares his thoughts on the #pharmageddon movement, with recent walkouts and efforts to unionize making headlines. He also breaks down a recent survey he posed on LinkedIn that shows the desire for more remote work opportunities and more pharmaceutical industry roles.

About Today’s Guest

Dr. Alex Barker is the CEO and Founder of The Happy Pharm D, a nationwide coaching firm guiding pharmacists to inspiring careers and more fulfilling lives. Alex is an accomplished public speaker, a published author and teacher. Since 2017, his coaching program and career development seminars have guided over 2,000 pharmacists into new jobs and roles they love. His book Indispensable: A prescription for a fulfilling pharmacy career, has motivated countless pharmacists to love pharmacy again. Alex is a husband and the proud father of two daughters. He loves drinking coffee and eating good guacamole (though not at the same time). When he isn’t working, which happens occasionally, he plays Nintendo, Dungeon & Dragons, and reads comics.

Key Points From the Episode

  • Pharmacy job market trends with Alex Barker. [0:00]
  • Pharmacist shortages and dissatisfaction. [4:32]
  • Pharmacy industry changes and the impact of walkouts. [8:49]
  • The impact of AI on the pharmacy profession. [13:20]
  • Career paths and professional identity in pharmacy. [20:01]
  • Remote work opportunities for pharmacists. [24:57]
  • Industry trends and career shifts in pharmaceuticals. [30:36]
  • Pharmacist career paths and industry perception. [35:32]
  • Pharmacy profession’s future in 10 years. [40:36]
  • Pharmacy industry trends and predictions. [46:19]
  • Pharmacy career development and job opportunities. [52:17]

Episode Highlights

But the future of pharmacy cannot be product-only related anymore. It can’t just be about medicine. Because the opportunity is just not there. So my hope is that for anyone in one of those positions, whether in hospital or in community, you’re thinking ahead and looking to the problems of the business, what they currently have. And hopefully getting super curious about how you can solve these problems.” – Alex Barker [17:11]

“I think it reflects our professional identity, we love A to Z plans, right? We want it all laid out. We want to know what is the right thing to do to be a pharmacist practicing at the height of our license. And once we have that plan, then we know that we just, we just got to stick to it. And we have been trained and programmed through our education system to I mean, just really just do that. From kindergarten to the last day of pharmacy school, we were told exactly what we needed to do. And then we get out into the real world and realize that it never operates this way.” – Alex Barker [20:38]

“And I was like, man, what, what is the message we’re sending to our pharmacists that like, you’ve got such a narrow skill, there’s nothing else that you can do with it. I mean, there’s, there’s so much – from teaching to leading to being a manager. And I mean, practically any sector, because we’re all organizationally minded. I could go on and on about the different jobs that we could do, even outside of pharmacy. But there’s so much opportunity out there. But the narrow-minded nature of looking at what you can do, I think prohibits people from seeing jobs that they could actually have a lot of fun doing.” – Alex Barker [26:07]

“But we need to influence the public much differently about who we are and what we’re capable of. Because until the public gets it, they’re not going to go along with this idea of oh, I need to schedule an appointment with a pharmacist and I need to pay a pharmacist to do something for me. When for decades, if not well over a century or two, it’s been free to talk to us. You can’t just undo that, because we now have a doctorate. It is going to take decades, if not centuries, to get people to see that we’re different.” -Alex Barker [41:06]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week I welcome back Alex Barker, the founder and CEO of the Happy PharmD to talk all things pharmacy job market, including his outlook for 2024 and beyond. We discussed Alex’s take on Pharmageddeon the recent walkouts and the efforts of pharmacists to unionize, the desire and shift that he seen for pharmacists wanting remote work, the transition that’s happening to pharmaceutical industry roles, and Alex’s vision for the profession of pharmacy 10 plus years into the future. Alright we got a good one for you this week. Let’s jump into my interview with Alex Barker, the founder and CEO of the Happy PharmD. 

[START OF EPISODE]

Tim Ulbrich  00:48

Alex, welcome back to the show.

Alex Barker  00:50

Thanks for having me, Tim. It’s a pleasure.

Tim Ulbrich  00:52

So you’ve been on several times. I suspect most of our listeners know who you are. But just in case, give us a quick background and who is Alex Barker? And what is the Happy PharmD.

Alex Barker  01:03

So I created the Happy PharmD in 2017 to help pharmacists get careers and jobs that they would actually enjoy. I was on that pursuit myself. I was a burned out pharmacist for a few years as a clinical pharmacist. Didn’t enjoy it all what I did spent five years trying to figure out that process of creating a job that I would love. And here I am doing it and now helping now over I want to say it’s like 2400 pharmacists that have gone through at least one of our programs, I’ve taken one of our classes. And we’ve learned a lot about what pharmacists want and what they don’t want. And I’m excited to share some of those insights with you today on the podcast.

Tim Ulbrich  01:47

So fun fact, Alex, I don’t know if we shared this on the podcast before but that was one of your early early clients. 

Alex Barker  01:53

You were!

Tim Ulbrich  01:54

This would have been way, way back when in 2016? 2017? At the time, Tim Church and I were writing the book Seven Figure Pharmacist. 

Alex Barker  02:03

Yep.

Tim Ulbrich  02:03

We were just launching the brand, the community trying to figure out what was the next step of kind of moving that from a hobby to a side hustle to a business. And that was fun, and you provided tremendous value to me, and to hear that you’ve helped over 2000 people, your team has helped over 2000 people, and many more to come. That’s legacy stuff. That’s pretty cool. So congrats to you and the team at the Happy PharmD. That’s really awesome.

Alex Barker  02:28

Thanks. Yeah, it feels good. At first, it was just about helping people and it became more about families and changing the profession. And to me, that’s what’s exciting. You know, a lot of the pharmacists that come to us are from hospital and community typically, that’s where the majority of the jobs are. And that’s where a lot of people are burned out or tired or just have low, you know, job satisfaction. And getting them into stuff that they actually enjoy frees them up, they get to be present with their families more, they get to go to the soccer game, they get to pick them up from school. I mean, you’re doing that now, right in your business, you know that there’s, there’s nothing better than enjoying your work and living the life that you want to live. So it’s a privilege that I get to do it.

Tim Ulbrich  03:20

I love I always share people’s are thinking about starting business or business ideas when you can find that intersection between a business that is solving a problem that people are willing to pay for. And it aligns with something that you’re passionate about. And it’s adding value and is adding transformation. That’s a really sweet spot said it doesn’t mean it’s gonna be easy, but it’s a sweet spot to sit in. So I’m excited. I really wanted to talk about career trends in our profession, maybe for obvious reasons. There’s a lot going on out there. And we’re gonna dabble in several different topics. But this is a topic I’ve been interested in throughout my career. I’ve done career development in previous roles, but you are the expert, your team are the experts when it comes to career development, career transitions, career trends that are happening inside of a profession. And so I wanted to pick your brain on what the heck is going on right now. What’s your take on? You know, some of the hot topics in our profession? Where do you see things going? Not only in 2024, but I’m also gonna ask you to project out a little bit further than that. And you know, where do we see things going with a lot of the disruption and the change that we have come in, but it’s I graduated 2008 And that wasn’t that long ago, but a lot has changed in a very short period of time. 

Alex Barker  03:52

Yeah, back then. It was six figures in a car. Right? That was the thing. It was just about ending around 2008.

Tim Ulbrich  04:39

Uh, it was still there. I mean, there were there was six figures and a car I would say for a couple years. Probably getting towards the end of that I remember the the line that kept going around our class. There were rumors of a million dollar contract out in Alaska for three years with one of the chains. I don’t know if that was true or not. But that was kind of there right. That was a day and age that we were in. And, and that was a day and age when it was a, Hey, don’t worry about your student loan debt, like it’ll just take care of itself. So thankfully, we’ve made some dents in that. But I want to talk about first, you know, the Pharmageddon that has been coined recently, the recent walkouts that I think everyone is realized not only internally through people that have been cheering, but that’s made national news outlets, CNN, NPR, NBC, and so forth, and some recent efforts and announcements around unionizing, which isn’t a new effort, per se, but it’s a rejuvenated one. And from the individual that does this work in and out who follows these trends, who runs your own data and looks at the workforce, what do you make of this? Is it? Is it a new era that we’re heading into? Is it a reaction to something that’s brewing for a long time? And are we actually going to see change that comes out of this? Or is it going to be more of the status quo going forward?

Alex Barker  06:03

All great questions. And I’m, I’m so glad that I get to be recorded, so I can be on the record, because then I can six months from now, I’m gonna I can look back and say where what I was wrong about. So I think you and I know that a lot of these complaints be that were sourced from the walkout. I mean, we’ve known about them for years. Every pharmacist kind of knows that a lot of the sources of a lot of our problems, where they exist, where they are, we don’t need to go into them. But they exist. And I think this was a kind of like a reaction of the straw that broke the camel’s back. Right, we just got through the pandemic. And arguably, the stress then was potentially maybe higher than it is right now. I think we’re seeing a gestalt, which is one of my favorite German words, of a problem that is so complex, and it involves multiple things. The one of the factors that I think is newer is the this new generation of pharmacists. This new generation of pharmacists is different than everyone before it, because they are actively refusing to take the majority of jobs that are being offered right now. And from big business perspectives, that’s they say that there’s a shortage of pharmacists right now. And they they attribute that to the response of like, okay, well, we’re just not able to find pharmacists to fill, like basic positions that we’ve had open for years. But the truth is, is that there are more pharmacists than what the market needs right now, just from looking at labor supply and economics. But they’re not willing to take these jobs that are out there. And we’re also seeing, and I think you’ve heard this rumor as well, that more and more pharmacy residents are just straight up quitting their residency programs. I just spoke to one last week, who just had a gut feeling this wasn’t for her, this isn’t what she wanted. And while I don’t know if ASHP is reporting that data or are talking about the residency, quit rate, everyone is acknowledging that like this is getting higher and higher.

Tim Ulbrich  08:32

So which, which in our day and age, Alex, and we’re dating ourselves a little bit, like that was a hard, you do not do that ever, or, you know, professional consequences. And so that’s an interesting, I don’t know that the data and I don’t know how that is or is not reported. But that doesn’t surprise me. 

Alex Barker  08:52

No. 

Tim Ulbrich  08:52

And it’ll be interesting to watch that trend if it continues.

Alex Barker  08:57

What I’m looking at I know that I’m heavily biased towards like generation and thinking about the next workforce that is coming in. There’s obviously a lot of work environment issues, there’s a lot of reasons why the walkouts have been influenced by the decisions that a lot of these I mean, let’s be honest, it’s it’s just the retail chains that this is being the focus of, you know, the big ones. But generationally, this new generation that’s coming into the workforce is poised to change things. Not to deviate too much on a topic that isn’t related at all to pharmacy. But anthropology has documented research to show that generations follow a pattern. And this new generation that is coming up in into entering into the workforce is the one to change things. We are going through a period of change that is similar to the time period of the Great Depression and World War Two. The greatest generation is what they were called. And they lived in a world of turmoil, of uncertainty, and things that I hope that we’re not going to repeat in today’s age. But that generation is the same generation that’s coming into the workforce. So my one of my predictions is that the health care system is not sustainable. It will change. It has to change. But how it’s going to is, I mean, totally up for debate. But the system has a lot of cracks. And I think the walkouts is just one of those symptoms, right? It’s poised for change and reform. Now, it’s going to be up to whether or not the powers that be listen, to make those changes happen.

Tim Ulbrich  11:05

I think a couple of the trends that I’m watching, and again, just the day and age that we live in, I’ve been in some meetings recently, where there’s been individuals at a fairly high level, at a chain level talking about the you know, the response to this, and what’s involved in this. And one of the “aha” is I had through those conversations is that, you know, if you think about the groups that are walking out, and who are, you know, able to have some of these momentum around the Pharmageddeon, they can mobilize quickly, or they can mobilize quickly in the messaging, they can mobilize quickly and getting the word out there. And for anyone who’s been in a management leadership role, you know, that you can’t necessarily mobilize quickly when it comes to getting press releases out, getting information out in a way that, you know, perhaps reaches people where you want it to reach and is set in a way that you want to be said without a lot of the guardrails around it. And that’s an interesting dynamic to watch right now of like, who’s really controlling the communication streams? And I think that’s gonna be an interesting one to follow. Because, you, Alex, you had a post, you had a poll on LinkedIn recently, where you asked people about the impact of the walkout, you had over 600 votes. 45% responded, that they didn’t think the walkouts were going to have any change on the industry. 40% responded, they thought eventually would change the industry. So depending on if you’re half glass full or not person, you can look at that one way or the other. But my question is, like, Where? Where does this go? Right? Because when you think about the book that always comes to mind is former presidential candidate Andrew Yang wrote a book called The War on Normal People, several years ago, and he talked about the impact or potential impact of autonomous driving on truck drivers. And I remember hearing it at the time and thinking, Wow, what a good example, and this was, you know, five, six years ago, I think I read that what a good example, for us to be thinking about pharmacy. And the picture he paints is, you know, a cohort, a workforce, largely middle aged men. For the most part, some of them may have previous degrees or training, many do not 1520 years into the career. And let’s imagine a scenario where all of a sudden, well, those jobs are replaced by technology. Now, there’s been a lot of developments since then autonomous driving, and you know, what’s, what’s the trajectory? How fast is that going to go? But it’s a really good exercise for us to think about as well in pharmacy. If we think about community retail chain pharmacy, if we fast forward 10, 15, 20 years, the pathway of automation and technology is there. Now, we may not like it or want to hear that outcome. We have state boards of pharmacies and regulatory bodies that I think are potentially going to slow that disruption. But it feels like it’s a matter of it’s going to happen. It’s just a matter of when is it 10 years, eight years, seven years, six years, three years. And so when we’re talking about 50% of the workforce, you know, the work you do and coaching people through career transitions, we potentially have a huge chunk of the workforce that we need to be thinking about redeployment into other fields. And does that come quick? Or is that more of a slow off ramp? Or am I being dramatic?

Alex Barker  14:16

What comes to mind is the entire horse industry, like in 1914, which I think is like the year before the Henry Ford model came out. And then in a matter of two years, an entire industry fell apart. There wasn’t a need for blacksmiths. There weren’t any for stables. There weren’t a need for breeders, as many veterinarians. I mean, tons of people’s lives were impacted in a matter of just a couple of years. Because we innovated on technology and we created something more consumer. Beneficial, right? The car. When I think about technology, innovating. I look back to that 1999 congressional statement talking about the shortage of pharmacists that was going to happen, which never happened. There was never a shortage of pharmacists. And there was no real indication. According to actually one book that analyzed this prediction, there was really no significant signs that indicated that that was ever going to happen. And also, they didn’t equate for the changes in technology that was going to happen in the early, you know, 20s, or 2000s. So, when I think about what’s going to happen, AI, in the huge boom that we’re going through right now, I think it’s really similar to like the dot com boom and bust that happened in the early 2000s. When I think about the core aspects of pharmacy, it’s the human element that has always been present. And for the things that are more mundane, that can be handled technology by technology, I think those will be replaced. How do we redeploy those people? I think it involves learning new skills and building new models. You know, you and I talked a little bit before this that like, what does the future look like in pharmacy, and what do I hope for. My hope is, is that we figure out who we are. My hope is, is that the associations band together instead of vie separately, and really try to create a unified, professional identity about who we are, and what we do, and elevate and showcase those pharmacists that are doing those practices and leading the way forward. Because the dispensing model is done, it’s been done for a while. And there’s really not a lot of innovation happening there. There are some really cool players in the independent space that are doing innovative things with moreso services, clinical services. But the future of pharmacy cannot be product only related anymore. It can’t just be about medicine. Because the opportunity in the states is just not there. So my hope is is that for anyone in one of those positions, whether is hospital or in community, you’re thinking ahead and looking to the problems of the business, what they currently have. And hopefully getting super curious about how you can solve these problems. You don’t have to start a business. You know, Tim and I are just entrepreneur fanatics. We love talking about it. But you can figure out problems in your current organization. And that’s really how to create an indispensable career. It’s just focus on those problems, get super curious about them, try to fix them. And that’s how, that’s how job opportunities happen. Because I mean, just one thing about AI, you know, that created a brand new industry out of thin air. Chat GPT revolutionized everyone’s access to AI, and created so many jobs. And I don’t see a whole lot of people in pharmacy going down that route. It is totally doable. It’s totally possible. In fact, that pharmacist I mentioned earlier, who quit her residency is doing just that she is now going into the AI and startup route and utilizing her pharmacy knowledge. So it’s not impossible, it can create new jobs, but it’s going to eliminate ones that the market really no longer values. 

Tim Ulbrich  18:51

Yeah, and this, you know, what you’re sharing is obviously so deeply connected to the work that we do at YFP, because for someone to have the capacity to go explore other opportunities, even if that’s on the back of them staying with their current employer. Let’s say we know the train, we know where the train’s going. But I’m gonna ride that train and kind of buy myself some time to be curious and go explore these other things. Having the financial plan and the foundation in place to allow yourself to be curious. Right, I often will say is if someone doesn’t have their financial house in order, you will suffocate curiosity. And it doesn’t have to be to your point. It doesn’t have to be a business. And actually, in the vast majority of the cases, if we’re talking about the numbers we’re talking about, we have over 330,000 pharmacists, in our profession, half of them work in the space that is tied in some way to a product, if we’re talking about any percentage of that being redeployed, it’s not going to be a big dent, that’s going to be entrepreneurship. It’s going to be what you’re talking about. It’s going to be people that are identifying opportunities, you know, within organizations that maybe are in the Department of Pharmacy, maybe they’re not and this is like any other profession any their career direct trajectory. For the most part, obviously, there’s some examples where it’s a very linear path. But for many of us that graduated, you know, I graduated at 24 with a 06 doctorate program, I was put on a one way linear path. And we get stuck thinking on that pathway. And when you talk with people that, you know, maybe they graduated with an undergraduate psychology degree or a business degree, and then they took one job, and then it took another job and another job and they skill stack over time. Right. But you can’t say draw a clean line of experiences, like we want to envision in pharmacy. And I think that’s a, that’s a scary thing to think about.

Alex Barker  20:38

I think it reflects our professional identity, we love A to Z plans, right? We want it all laid out. We want to know what is the right thing to do to be a pharmacist practicing at the height of our license. And once we have that plan, then we know that we just, we just got to stick to it. And we have been trained and programmed through our education system to I mean, just really just do that. From kindergarten to last day of pharmacy school, we were told exactly what we need to do. And then we get out into the real world and realize that it never operates this way. Maybe Only in rare circumstances or going into a major corporation, do you see the ladder before you. But in pharmacy, the ladder is really short. Most people do not go up the corporate ladder, save maybe in pharma. But it’s all just about well, get your degree, pass your boards. Go get a job. Yeah. And then that’s it. Yeah. And I think you the other aspect, you know, something you mentioned is getting into that track. I think about it’s who you’re surrounding yourself with.

Tim Ulbrich  21:52

I was just thinking the same thing. 

Alex Barker  21:54

Yeah. I was gonna ask you, you know, once you entered into the workforce, did you kind of feel like you, you came out of school, maybe like really excited, right, I finally have a job, I’m gonna get paid to do this thing. And, like, there’s excitement to both learn and practice. And then you look at everyone around you, and no one else feels that way. Everyone else is like, it’s Monday, you know? What you do this weekend? Like, there’s just no passion there. At least that was my experience. And I think if that’s who you surround yourself with, that’s who you end up becoming? Yeah.

Tim Ulbrich  22:38

And to that point it, it can become an echo chamber, you know, you talked about the short ladder, like, you know, this is true in any any part of life, we’re talking professional here, you know, this is true in your financial life and in business and your pursuit of physical wellness, and in your marriage, anything like, you know, are we being stretched and challenged? And are we being curious, right to your point, I love that word, curiosity. And if, if we’re in an echo chamber of, you know, our department, where everyone’s thinking and looking at the same short ladder, well that’s the only ladder we know? And you start to put yourself in situations where you realize, wow, like, she did something really cool. And I’m thinking about your community, Alex, and the Happy PharmD like, so and so you know, had this opportunity. And then they went here, and they did this and this and they realize it’s about the skill stack. And and I always love to give the example of my brother, because he’s such a great example of this, where you’ve got to get yourself out of the mindset of your degree, and the only thing you can do and really focus on your skills and what you can bring. He was an industrial engineer by training, he went on the fast track to investment banking, with one of the large firms, you know, was grinding that out for several years to the to the point where you know, his bonus was bigger than the salary, one of those gigs, doing huge international banking kind of got to this point of like, I see what I see. And I don’t want this to be the path that I’m on for the next, you know, 20 plus years as I raised my family walked away with no plan, moved from London to Buffalo, where we grew up, took nine months to explore, like, what were the things that he liked, didn’t like, what was he interested in? Not what was his degree or where he worked, but what could he bring to an organization? How can he tell that story? And he ended up taking a job as a president of an advanced manufacturing firm. Right? And then he eventually left that and he’s since bought a business and doing something that’s completely different. It’s about the mindset and the skills. And I suspect that a lot of the work that you do with your clients is kind of breaking out some of the shell and the habits that we form.

Alex Barker  24:43

Yeah, in fact, we we have a survey that we’ve been developing and working on, where we assess where pharmacists find the most fulfillment and what careers match that kind of fulfillment. And overwhelmingly, every pharmacist has a very high rating for anything relating to soft skills. So very few people care so much about like the actual hard skills of pharmacy. Right. So whether it’s dealing with software, programming, yeah. Providing patient assessments, like anything that you’ve learned technically probably from from school, consider it a hard skill. But where pharmacists don’t really utilize, I think, very well for career development is just all the soft skills that they build in any job that they’ve ever had. Those skills can follow you to wherever you go. I just did a, I just did a Class CE, this morning about impostor syndrome. And there was a few people on there that were saying, like I was, I was working a pharmacy job, and I quit, I had had enough. And I don’t think my skills lend themselves very well to any other kind of job. And I was like, man, what, what is the message we’re sending to our pharmacists that like, you’ve got such a narrow skill, there’s nothing else that you can do with it. I mean, there’s, there’s so much – from teaching to leading to being a manager. And I mean, practically any sector, because we’re all organizational minded. I could go on and on about the different jobs that we could do, even outside of pharmacy. But there’s so much opportunity out there. But the narrow minded nature of looking at what you can do, I think prohibits people from seeing jobs that they could actually have a lot of fun doing.

Tim Ulbrich  26:47

So as typically goes when you and I get on a conversation, I think I had 10 or 12 questions prepped. And I’m on question two, so. But I want to ask you about a trend that I’ve been following from afar, but I know you’ve been looking at closer. I saw you post on LinkedIn several times, which is a trend and a shift around remote work. He had a post recently on LinkedIn that said, you have been inspired by countless success stories of pharmacists who’ve embraced remote roles, reclaiming precious moments with family and friends exploring the world being present for all the important things in life. The perks of remote work are limitless, but it often comes at the cost of a potential pay cut. So what are you seeing in terms of both the interests, you know, what’s driving that interest around, remote work, and then the opportunities that are available in that space?

Alex Barker  27:35

So let’s start with the opportunities. Practically almost any job can be remote for pharmacists. Now, I say that with some caveats. The most common jobs right now are community and hospital. Most people have heard of remote fill pharmacists for hospitals. But what about in the community setting? Well, like it or not, there are policies being put forth in multiple state legislatures that are allowing pharmacists to remotely manage pharmacies in communities where there’s not a lot of access to pharmacies. I am not a fan of that kind of legislation. But I just pointed out as to say, bills are being passed right now to make pharmacists more available to patients via remote access. But where a lot of people are focusing their remote kind of work is in pharma. Those typically don’t rely on people coming into a physical building. So a lot of pharmacists right now are really interested in that sector. But there’s plenty of remote jobs available for just any. I mean, right? I get alerts for our clients. And I just saw a job come in for ambulatory care pharmacist remote fill. And I was like, oh, no, I’m not remote fill, but just remote job. And I was like, Yep, it’s possible care. Yeah. As far as what I’m seeing, I was actually shocked by that poll. Because, I mean, I didn’t I didn’t look at it this morning. Because I mean, it’s hot off the press. It’s still being filled out now. But I think it was like 88% of people said that they would be willing to take a pay cut to get a remote job. And I was honestly surprised by this response. But when I think about it, when I think about who pharmacists are, I mean, we’re typically remote driven people, technically. We are people that want to be present with our families. We normally have families, or they wanting to start one. This newer generation in particular, is really fascinated by location independence. They’re fans of technology, so they’re willing to adopt it in their lives. They don’t necessarily want to be in a location where there’s other people all the time. There’s definitely hinder. And there’s reasons not to pursue remote work, especially for any relationally minded people that thrive being around other people. But yeah, right now, it’s it’s kind of overwhelming. I made that post and I got a lot of messages to respond to from people saying, Okay, you talked about it, where are they? I’ve been looking for a job. And I want to I want to get one. So it’s, it’s been interesting to see, but I suppose I shouldn’t really be surprised by it.

Tim Ulbrich  30:36

Yeah, I’m glad you brought up industry, because that’s a trend that I’ve been watching as well, that makes sense that connection to remote work. I actually talked with a industry fellow recently, who is thinking about geo hacking, to, you know, technically, like there’s not supposed to work remote, but they only have to come in the office about four times a year. And usually it’s 24 hours notice, she says, like, well, for four flights a year, and I can, you know, have a Boston salary without living in Boston, right. But this is a trend I’ve been watching, you know, the data from the workforce still still shows us as a fairly small percentage of the workforce. But it feels like the dialogue around it is a lot bigger. I’ve talked for several pharmacists in the last year, you know, people that have gone from PGY1, one PGY2 to critical care, hemonk specialty roles, sometimes it was from the pandemic that burned them out, you know, others are just looking for other opportunities. And there’s a shift that’s happening to industry. 

Alex Barker  31:32

Yes.

Tim Ulbrich  31:33

 And I’m curious to hear what are you seeing the same and then to what’s driving that? Is it burnout? Is it you know, typically, industry roles come with higher compensation packages, perhaps more volatility, something we’re probably not talking enough about? But what are you seeing as some of the drivers of this shift? And is that a shift you’re seeing? 

Alex Barker  31:52

Oh, yeah, totally. Pharma is the new sexy career to pursue. I just spoke with a professor. I won’t say which school, but I spoke with them about what are students saying they want for preceptors that was like what, what kind of rotations. And she said, it’s always Pharma. That’s what they want. They don’t want clinical anymore. They don’t want community, they get disappointed when they get in a hospital. They want to see pharma jobs. And I think the truth of the matter is, is that the pharma market isn’t ready for this. There isn’t a demand there. There’s a demand on the pharmacists side, there’s a demand from our profession to get more involved, which I think hasn’t been present for the majority of our profession, when I graduated, and I think you can attest to this. We’re getting old Tim, it just hit me. When I graduated pharmacy school, the the the dogma of the time was that you were a bad guy if you went to pharma. You’re just in it for the money, you’re working for the bad guys. You need to be a pharmacist, you need to be a clinician, because then you’re you’re doing what’s right for the patient. Not what’s right for the company. Well, that is almost completely gone. I haven’t heard that from a student once or anything like it, everyone wants to get into it because of the potential for remote work, the potential for work life balance, the potential to just get away from the public. This is a newer one, that at first, I was a little bit surprised by, but for those that are burned out, it makes a lot of sense. You’re not having to deal with angry customers all the time coming at you with any sort of array of problems or anger issues that you cannot predict. It’s tiring to work with the public. And so they see the potential to work in pharma as a way of escaping I think a lot of those things. But it’s not all, you know, sunshine and rainbows in pharma. You know, there’s less job security that’s there, you’re more likely to be let go due to industry changes, market changes. You are more likely to be there, well, I shouldn’t say that with certainty. But there there’s just as many toxic work environments in pharma. There is more job satisfaction by comparison. If you just look for one for one, like job satisfaction rates between pharma and just typical pharmacy, but burnout is still present. So while I know that the opportunity is there, and frankly, like it’s so easy, from my perspective to just get started in doing side gigs in pharma that you can make some extra cash doing those things. But it’s a whole other thing to transition into the field with a job and expect remote, expect a nine to five, Monday through Friday. There are other pressures there for sure. So you have to be careful about who you I mean, what companies you want to get into. The trends are there. I don’t see it going away anytime soon. 

Tim Ulbrich  35:31

Yeah, yeah. And I’ve come to appreciate, you know, this better than I oxys you guys work in this more, but I’ve got a longitudinal appy student right now on an entrepreneurship rotation with us that’s looking at biopharmaceutical industry fellowship programs, and just hearing about all the different spaces within the pharmaceutical industry, I think, you know, in my mind, not speaking for others, tend to paint this broad brush of, you know, industry just like we do and chain and hospital and ambulatory care and academia. But really, there’s layers and details and segments, and yes, you know, MSL roles versus other, you know, regulatory roles. And so, so much to learn about, you know, it’s probably not just fit with pharma, but what is the fit with the specific areas of interest. And from a career placement standpoint, I would think that’s a really important piece to understand to then determine your path for networking and an opportunity.

Alex Barker  36:24

Right, a lot of people think Pharma is just one path. But we’ve identified I think, like eight different sectors. And within each sector, there’s like, eight to 15 different kinds of jobs that pharmacists can do. Some more popular than others. Obviously, clinical medical affairs is way more popular than things like R&D and biotech. But it’s still possible one of our coaches, went from retail chain manager to getting into biotech and helping out with operations. So like, it’s there’s endless possibilities. But it’s a totally different market. It’s not patient care, which is, like, love it or hate it, it’s our bread and butter as a profession. So it does take a leap to get into it. 

Tim Ulbrich  37:14

Yeah, and I think another side conversation that we can have, and save for another day is, you know, so much of the opportunity for our profession does stem whether we like it or not from the public and other’s perception of who we are and what we do. Yeah. And, you know, I don’t think a pub the, the lay public would necessary associate a pharmacist role with being in the industry. So that this goes back and interesting discussion, we think about, like redeployment of our workforce. You know, there’s some sub discussions in there that are really interesting to me of, well, how does that impact the public’s perception of who we are and other healthcare professionals perception of who we are, because right now, we may or may not necessarily like what the perception is, but people largely associate a pharmacist with doing one or two types of things. And we’re now starting to splice that pie chart a little bit further, which is interesting. I think it’s exciting, but also presents maybe some challenges around communicating who we are and what we do. And then how do we educate this pathway that could go in 30 different directions right now we educated to go really in one or two directions. For the most part.

Alex Barker  38:20

You know, I hear a lot of talks about this kind of thing, like within associations, mainly. Maybe a little bit in academia. But I think we have a, we don’t really understand how the market is influencing us. I think the the people in charge of pharmacy, I think for a time they thought, you know, if we just increase our level of education, people will respect us. But hindsight is 2020. And I think it revealed that the market didn’t care. The job market didn’t care. The public didn’t care about this demand. They weren’t telling the powers or regulation, or government bodies, pharmacists need more education. They need to get doctorates in order to do what they can do. And we’re still recoiling from that decision to increase our education, but the job market and the jobs available, don’t demand that higher level of education. So when I think about how we influence the public, I think we put a lot of heavy burdens on ourselves as a profession to try to maintain across the line when we aren’t even looking at the low hanging fruit. So I’ve I’ve publicly said this in a few different places. And there isn’t a whole lot of movement yet because I don’t have the time, but If I was to predict, if everything goes right Tim, and I am able to do this, I would want to create media that positively influences what pharmacists do can do. And I don’t mean cheesy patient stories or pharmacist stories about how they can save person’s life, you know, those are good. They’re good. But like, we need a Hallmark movie about a pharmacist falling in love. We need…

Tim Ulbrich  40:36

Is there a producer of Hallmark that’s listening to the show? We’ll found out.

Alex Barker  40:39

Like maybe, I hope! we need a Breaking Bad story about a pharmacist who, who has a tragic backstory to him and he goes into the pharmacy, does what he can for the community, At night, he’s like a vigilante busting of drug rings. We need video games that showcase what we can do. I don’t know what it is exactly. But we need to influence the public much differently about who we are and what we’re capable of. Because until the public gets it, they’re not going to go along with this idea of oh, I need to schedule an appointment with a pharmacist and I need to pay a pharmacist to do something for me. When for decades, if not well over a century or two, it’s been free to talk to us. You can’t just undo that, because we now have a doctorate. It is going to take decades, if not centuries, to get people to see that we’re different. We can do things we can we can change people’s lives, we can save people’s lives with what we do. But we’re not going to just make it happen if we just make the service. So that’s my Hallmark movie pitch.

Tim Ulbrich  42:09

I love it. Well, speaking of Hallmark movie pitches, maybe we’ll have it in time for the timeframe of my next question, which is 10 years from now. So your vision of our profession in 2033. And let me give you some background statistics that kind of frame where we’ve been starting in 2013 to 2023. And then I’ll ask where you think we may be in 2033. So 2013, we had a little over 60,000  – 62,000 that were enrolled in a PharmD program. The median debt load of a pharmacy graduate was $130,000. And median salary was around $116,000. In 2023, fast forward 10 years actually, some of this is 2022 data, we’re down from 62 to about 47,000 enrolled in a PharmD program. And we know that’s still going down further. Median debt load is $158,000, up from 130. And then finally, we’re seeing the average farmer salary is up from about $116k to $129k. And we know there’s some limitations with with BLS data, but we’ll use that for the sake of the conversation. And then if we draw the pie chart right now, using the workforce survey data we have from 2022. If you combine those that are working in independent pharmacy, mass merchandiser chain, etc, it’s about 50% of our profession, about a quarter, 24%,  or an inpatient/hospital/health system practice. And then the remaining 25% is a spattering of all different types, you know, managed care, fusion, academia, ambulatory care, etc. So when you think about income, when you think about enrollment, when you think about jobs, when you think about types of jobs, like where are we in 10 years? Because I think one of the questions that I think a lot about is where would things be moving with or without the guardrails of the State Boards of Pharmacy? Right, but I think you use this situation we’re in right now that led to a lot of the walkouts and things. The State Board of Pharmacy response has been largely speaking very pro pharmacist. Yeah, obviously, technology, automation for profit companies, all that, perhaps would be moving much faster if it weren’t for that. So I’m just curious where in 10 years, do you see us going as a profession?

Alex Barker  44:34

I can’t wait for 10 years when I listen to this and I go, Oh, Alex. Oh, Alex, if you only knew. So I’ll lay out my biases. I try to be more optimistic than pessimistic. I believe innovation is a great thing. But it’s not without its casualties. Um, and I have a lot of half baked theories. So a lot some of this is going to come across as like, Where’s that coming from? I think in 10 years time, it’s 2023, almost 2020, or I’m sorry, 2020 or 2034? Yeah, I think what will happen, is PBMs are going to get a lot more pressure put on them from lawmakers and the public. I don’t know if they’ll still exist by then. We are the only nation in the world, I believe that uses this model. And it’s a broken, unsustainable model. It’s already starting to get some pressure put on it from a few different places. But these organizations have a lot of money. So they’re not going to go down without kicking and screaming. It’s going to be a fight. And I think there’s going to be some major legislation and court cases to be had over the next couple of years. I think that innovation will continue to drive service delivery within the pharmacy sector. So I think that this is going to drive market demand. I speculate that there will be a new role invented by 10 years from now. I don’t think it will be a pharmacist focus role. I think it will be like a pharmacy advanced technician. I’ve already seen some, like courses and certifications and things in place for that. But I think that the tech check tech programs have been validated enough, both through I mean, we all heard about that Walgreens technician who faked being a pharmacist for 10 years. Right? Do you remember that a few years back, like 2018-2019. That was the biggest tech check tech program ever, with 10s of 1000s of prescriptions that were apparently safely approved by a technician, not a pharmacist. So I believe that there’s going to be almost like a new profession of an advanced pharmacy technician, or call it a downgraded pharmacist. Maybe a pharmacist who only needs- only needs- a bachelor’s. And because that’s what is needed in hospitals and community pharmacy. You do not need a doctorate to practice pharmacy and those settings under current market conditions, current market conditions

Tim Ulbrich  47:47

In a distribution role. 

Alex Barker  47:49

Exactly. So I think Ohio is a great example of this. I think more and more clinical services will be passed through laws and legislation that will create new jobs. However, my fear is that it’s going to be the same story as MTM. I think that we’re based on the things that I’ve read, I don’t know how confident I feel that we are negotiating for all of our worth. And we’re gonna get another bad deal like MTM. So I think that more consultancies, more service oriented pharmacy solutions will be created over the next 10 years that’ll create really interesting and doctorate level positions, to be sure. But you know, everyone, I wasn’t there when MTM was created. But I remember and I’ve read the articles that people thought this is the wave. This is what we can do. And it’s been over 25 years, I think since its implementation. 

Tim Ulbrich  48:56

2006 was the implementation.

Alex Barker  48:59

Oh, was it? Okay, yeah. 

Tim Ulbrich  49:03

I think it was implemented with Medicare. My I’m sure Rob somebody correct me. I think it was Medicare Part D in 2006. 

Alex Barker  49:09

Yeah, I got into college 2006. So I definitely wasn’t paying attention. So it’s been like 20, almost 20 years. And it’s very rare to see a business successfully implementing it. It’s viewed more as a distraction now and so my my wonder is how well are we going to be able to negotiate that into actual payment for services. And I think that innovation will continue in technology and that will replace a lot of what is happening. I optimistically, am hoping for pharmacies to be more like clinics, almost as in a like, a step down from urgent care. But like this is the first place you go to with a problem or a question. And there could be some sort of billing process that could be developed through there. And really how these things can be profitable as both through services, but then also all of the front end stuff, all of stuff that actually makes pharmacies money today, which is not prescriptions. That’s the loss leader and has been now for well over a decade. I think that’s only going to continue unless PBMs power is somehow supplanted. But for what stands in its place, you’re talking, oh, my gosh, think about the amount of time and reform is going to be in place for something like that. In to the final point, which was about students, I really don’t think that pharmacy is going to bounce back in the next five to 10 years in terms of interest. Unless something significant happens from some sort of marketing perspective. Because right now, everyone in forums and online spaces, making it really clear that the money, the salary, the six figure job, which is like the new sexy thing, I don’t know, if you pay attention to that at all, but like, you know, there’s this whole trend right now of people saying like, Oh, they don’t even want to date someone unless they make six figures. Yeah, I’m so glad I’m not dating. But people are making it really clear, like, hey, the salary is great, but it’s not worth it. The debt, the workload, the stress. And this new generation, like we talked about earlier, is just not willing to take that they’re not willing to risk it to get the money, but potentially, like hate their jobs and their lives. So I think interest is going to decrease, which in turn, of course, means increases the salary for us, increases the demand for us from companies. But with innovation, technology, I don’t know how it’s all going to balance out. Those are some of my predictions, some hopeful, some not so hopeful.

Tim Ulbrich  52:17

It’s interesting. I think there’s, as I’ve expressed you before, like, we need more of a space to have these types of conversations and bring in other types of opinions and stakeholders, you know, without, without, you know, feeling like we have to walk on eggshells, you know, and to have those conversations and, you know, you do have to make some assumptions, right. And there’s gonna be some optimistic things, and some that aren’t as optimistic. But one of the things that I’ve always thought is interesting that you alluded to in your comments there is we have a physical footprint that is very unique all across the country. Now misaligned with a business model that is sustainable, and and one that people want to be working in, right, that’s the challenge that we’re in. But we have an interesting physical footprint that was developed. And we’ve run into challenges. You know, I think the maybe the vision 5-10 years ago was a really, pharmacists can fill a gap in the need for primary care of a shortage of which that shortage is getting greater and greater, as less and less physicians want to go into primary care, and they want to go into more specialties. Unfortunately, you know that I don’t really want to say that ship has sailed, but it’s pretty darn close when you look at what PAs and NPs have done in the inroads they’ve made. But we have this physical footprint, which is a very interesting thing to be thinking about. And is it in competition with is a different than primary, you know, what are the different ways we could be thinking about this, but I do think there’s some interesting opportunities here that need a lot more thought and discussion, and you bring up several of those right there. So that’s good stuff. As people are listening, if they’re thinking about making a career transition, maybe it’s a hey, I’m ready right now maybe it’s, this is something I want to be thinking about over the for, you know, future that’s coming up. Where’s the best place, Alex, that they can go to follow you, follow your work and get plugged into the resources that you have available?

Alex Barker  54:11

I think the biggest question people have is, What can I do? Will the next place be any better than what I currently have? Yeah. Are there other career paths for me? And those are all great questions that you don’t have to figure out by yourself. I spent five years trying to figure that out. When when Tim hired me as a coach, that that was a point in my life where I still wasn’t even really solidified in, hey, do I want to go into academia? Or do I want to create a business? And that takes a lot of time and effort on your part. One of the things that can really benefit you is talking to someone who is an expert on career development, and getting a perspective that is outside of you, with someone who knows and understands pharmacy. What I would encourage you to do is to go to our website, thehappypharmd.com, I’m sure we’ll have a link in the show notes, and talk with one of our career advisors. We have two of them on staff with us, Eric and Samar. And they’ve talked with literally hundreds and hundreds of pharmacists. And really, the first step that a lot of people take is like looking at, what can I do, and deciding on a path that makes the most sense for you, and then creating the strategy to transition, and not wasting a whole lot of time doing things like applying to countless jobs, that you may or may not even like, wasting time, not having productive conversations with people. But instead, I would encourage you, talk with us, have a conversation, it’s free to do so just like talking with a pharmacist. It’s free to hang out with us. And in that, you’ll get a little bit of a clearer vision of what you can do, and some next action steps to take. And if you do want to work with a coach, we can talk to you about what that is like, what it’s like working with a coach, and how right now what we do with our clients is we work with them until they get a job. So I’m really excited about the future of pharmacy because we’re helping people get all sorts of cool and awesome jobs, like just last week, talked to someone getting an MSL role. So it’s happening, there are opportunities out there. But I think there’s a smart way of going about it. One that is faster, takes a little bit less effort on your part. That’s with us.

Tim Ulbrich  56:41

Well, great, we will link to that in the show notes happy thehappypharmd.com. I’ll also link to Alex’s LinkedIn profile. If you’re not already following him on LinkedIn, I would highly encourage it. I enjoy the insights you share on the career market that we have going on, I really look at you as an expert in the space. So I’m sure we’ll have you on once if not twice in 2024. But for now, appreciate the recap, you’ve given us where we’re at and potentially where we’re heading. So thanks so much for coming on the show.

Alex Barker  57:08

Thanks for having me, Tim.

[DISCLAIMER]

Tim Ulbrich  57:12

As we conclude this week’s podcast and important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward looking statements which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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