behavioral finance

YFP 402: Building a Legacy: The Family Constitution Blueprint with Julia Myers

Posted on by YFP Media

In this episode, Julia Myers, pharmacist and founder of Generational Wisdom, shares her Family Constitution Blueprint, a tool to help families define values, build traditions, and create a lasting legacy.

This episode is brought to you by First Horizon.

Episode Summary

In this episode, Tim Ulbrich is joined by Julia Myers, a pharmacist and the founder of Generational Wisdom, a business born out of her own powerful story of transformation. Julia shares her Family Constitution Blueprint, a thoughtful and deeply practical tool that helps families clarify their core values, establish meaningful traditions, and create a vision that lasts for generations.

Julia shares:

Why identifying your family’s values is a powerful first step toward legacy-building
How to translate your intentions into everyday actions, especially in the midst of busy professional and family life
And how pharmacists and healthcare professionals can use these principles to create more alignment, connection, and purpose at home

Whether you’re raising kids, managing a household, or just want to live with greater intention, this conversation will leave you inspired and equipped to take that next step.

About Today’s Guest

Dr. Julia Myers is an international speaker, founder of Generational Wisdom, and a leading authority on teaching families how to talk to kids about money. Julia received her PharmD from University of Wyoming and her MBA from University of Tennessee. She spent nearly two decades as a board-certified pharmacist and distinguished health care executive before a career-ending diagnosis changed the trajectory of her life. Today, she blends wisdom and common sense to help parents navigate the pressures of raising kids without entitlement. As a mom of five, she brings both insight and authenticity to every stage she steps on.

Key Points from the Episode

[00:00] Welcome Back, Julia Myers!
[00:40] The Importance of Financial Planning
[02:04] Julia’s Professional Journey
[04:27] The Genesis of Generational Wisdom
[04:41] Defining Generational Wisdom
[07:44] Creating a Shared Family Vision
[13:47] The Family Constitutional Framework
[20:55] Engaging Kids in Family Conversations
[22:05] Adapting Family Plans Over Time
[23:10] The Three Ps of a Family Constitution
[23:30] Aligning Actions with Beliefs
[24:45] The Importance of Vision in Decision-Making
[25:18] Addressing Financial and Emotional Stagnation
[29:14] Taking Responsibility for Change
[31:07] Practical Steps for Creating a Family Constitution
[36:27] Celebrating and Preserving Family Values
[39:48] Final Thoughts and Resources

Episode Highlights

“ What do kids want more than anything in the world? To be treated like a big kid or to be treated like an adult. And so by pulling them into these kinds of conversations, you’re establishing that that’s just part of what we do.” – Julia Myers [21:07]

“ The way we grew up with money, or the stress or the anxiety we feel aren’t our fault, yet it is our responsibility today to decide how do we want to look going forward, what do we want to focus on? I think there’s power in being able to decide where you focus.” – Julia Myers [26:20]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich: Julia, welcome back to the show.

Julia Myers: Hey, so excited to be here, Tim. Thank you again.

Tim Ulbrich: Well, I am thrilled to have you back. We, we had you on episode three 11 where we talked about kids and money, a topic that’s near and dear to both of our hearts, and we’re gonna continue this theme around personal finance and the family and having a vision around how we handle our money and some of the intentionality.

Tim Ulbrich: Uh, of which we adopt the financial plan in our family. So we’re, we’re not gonna spend as much time on the kids aspect, per se. We will hyperlink to that previous show in the show notes if folks wanna check that out. But I would say this is a continuation, uh, of that theme. And Julia, as I was prepping for this episode, [00:01:00] I couldn’t help but think that one of the things I say on repeat on this show is that a good financial plan has to be accounting for yes, our future sell.

Tim Ulbrich: All the objective things, making sure we have enough in in our retirement accounts and we’re saving for our goals. All the important things we tend to think about, but also prioritizing living a rich life today. It’s the math plus the emotions. And as we talk today, this topic to me is one of those that maybe some folks will, will hear and say, Hey, I don’t know if I can put my arms around this in the same way I can, my retirement account, but oh, so important, right?

Tim Ulbrich: When we think about the financial plan.

Julia Myers: Absolutely, absolutely. One of my, my favorite quotes as we dive in today is Wealth Without Wisdom

Tim Ulbrich: Hmm

Julia Myers: wasted.

Tim Ulbrich: mm-hmm.

Julia Myers: So that’s where we’re gonna dive in today to really help the listeners figure out, okay, we can wrap our arms around our, our 4 0 1 ks, our retirement accounts, but how do we wrap our arms around?

Julia Myers: What’s [00:02:00] that meaning? What’s that legacy? What are we leaving behind?

Tim Ulbrich: I love that, Julia, because I’m convinced. We’re all gonna look back someday. Uh, if we’re, if we’re blessed to live long enough and this type of conversation and what we’re gonna talk about today, these are the things that we’re gonna look back and say, ah, that’s what really mattered. That’s what really mattered.

Tim Ulbrich: Alright, so let, let’s talk about your professional journey briefly. It spans pharmacy leadership business. Now your work with generational wisdom. Remind our listeners for those that didn’t catch episode three 11, what inspired the transition from a traditional pharmacy career to the work that you’re doing now?

Julia Myers: So I joke that I used to read the fine print and now I live it. And so this moment when everything changed for me was when I was handed a consent form from a surgeon as I was waiting for emergency eye surgery to repair a detached retina. So two hours before I was sitting at my work table looking at patient charts, [00:03:00] and the screen faded to black.

Julia Myers: We as pharmacists, we know this, right? If you experience sudden blurriness or changes in vision, you call your doctor right away. I went up two floors, saw the eye clinic. They said, you’re next for emergency surgery, and it was that fine print that basically said. How, you know, like, ready are you to hand everything off?

Julia Myers: And I was like, well, I’ve spent my career. I went to the University of Wyoming for my doctorate pharmacy degree, got my MBA from University of Tennessee, spent 17 years in, um, retail and then academic medical center. Like none of that mattered as I was filling out these forms. And so that moment really pivoted me.

Julia Myers: Because as I was signing, it wasn’t signing that I was prepared ‘ cause I was, I had a financial plan. I had done all the things right as pharmacists. We checked the boxes. I was signing that my family was prepared with the plan of what would happen if an emergency [00:04:00] happened or my unexpected passing. And in that moment, everything changed for me because I was hit with signing these forms and reading the fine print, which.

Julia Myers: You know, we all live the commercials, right? We we’re tired of seeing the family walk across the screen with a happy dog and we’re like, we don’t ignore what happens in the fine print, but we all might have to face that someday. And what hit me and changed everything for me was, is my family prepared or just provided for? Just provided for. And it stuck with me and I’m like, okay, when I’m on the other side of this surgery, what am I gonna do differently? So that they’re not just provided for that, they’re prepared. So that’s the genesis of generational wisdom. ’cause I want that to be the household term. That’s what I want us to pass on.

Julia Myers: ’cause again, wealth without wisdom is wasted.

Tim Ulbrich: Let’s talk about that term, generational wisdom. That’s gonna be the thread of our [00:05:00] interview, our time together today. What does that phrase, generational wisdom, what does that mean to you?

Julia Myers: To me, it means not an amount, but a mindset. It means how do you take accountability? Ownership and responsibility for those gifts that you’ve been given. And so, you know, there are so many ways that we are blessed as pharmacists, and there are so many ways that we have head starts. Our kids are now having head starts, and why did we do all this in the first place?

Julia Myers: You know, I’m the first person in my family to get an advanced degree and my kids only know life. Like that. They don’t know what it was like for me growing up where I tell a story about my first memories of money were counting coins and rolling pennies and stacking them and putting them into sleeves and taking them to the bank.

Julia Myers: Those were my first memories of money, and to me, that’s wealth. That’s what I [00:06:00] learned was that money mattered. Counting money, quantifying money. But now that I’m reflecting on this journey to say I was able to rely on my plan to bridge this gap, but how did I do that? It’s that wisdom that then leads to discernment.

Julia Myers: So the behavior is discernment. How do you know what to buy when you can buy anything? ’cause you can’t buy everything.

Tim Ulbrich: Mm-hmm.

Julia Myers: So discernment, how do you make decisions to me is wisdom. It’s that, you know, quote that talks about the serenity prayer of, you know, the wisdom to know the difference. What can you change and what can you not change?

Julia Myers: And I’m misquoting it, but that has stuck with me and it really is what it all is about.

Tim Ulbrich: Yeah. And how do we then develop. That vision, that culture for our family, as we think about generational wisdom, right? Passing down that wisdom, what are the behaviors? What are the habits? What are the mindsets? What are the experiences? You and I have talked about several stories on. Previous podcast webinars that we’ve done of core [00:07:00] memories we have.

Tim Ulbrich: You just articulated one right there of rolling coins. You took me right back to doing the same thing at my kitchen table, or when my dad took me to the bank for the first time and I opened up a debit card and it was like, Hey, all of a sudden I’ve got this piece of plastic and it’s accessing money and what is going on here.

Tim Ulbrich: I mean, these experiences, whether they’re intentional or unintentional, very much shape our money mindset. And I think a key piece that you and I have discussed before, how important it is that we start to get more in tune if we’re not already with what those experiences were for us growing up. So we can understand our money mindset and maybe some of the, the good experiences or the baggage that we have growing up.

Tim Ulbrich: Because the more we’re in tune with our own money mindset, our own money scripts, money philosophies, whatever we wanna call it. That’s the mode in which we’re often operating. And then of course, if we’ve got children that are watching, whether we think they’re watching or not, they are watching. They are watching.

Julia Myers: [00:08:00] yes.

Tim Ulbrich: I want to talk about a shared family vision. Thi this really energizes me and I, I think especially in today’s day and age, you know, I think about the phase of life that I’m in, Julia right now, I’ve got four boys. Five to almost 14 every night of the week, we’re running around to different types of activities.

Tim Ulbrich: It feels like from a schedule standpoint, things are constantly in a hurry from a financial standpoint, whether it’s youth activity, sports, you name it, right? There’s always opportunity. We’re just getting thrown so many things at us at once, and in this fast-paced world, it’s so hard. I think for us to slow down as a family and really define.

Tim Ulbrich: What our vision is, where are we going and why are we going there? That’s hard work, right? It’s, it’s, it’s easier to just keep going in the hurry. So tell us about, from your perspective, before we get into the details around the blueprint, if you will, for how families can begin to think about this. Why is it so [00:09:00] important in today’s fast-paced world for families to pause, slow down and define that family shared vision.

Julia Myers: Awesome tee up there, and I think the main problem is the disconnection. So calling out the disconnection of. What we think we’re building by doing these activities with our kids, what we think we’re doing by being in that busy and that hustle or building this retirement account or hitting that net worth.

Julia Myers: The disconnect is what we think we’re building and what actually lasts is not the same. And that’s a gap and that’s a way that we have to close it. Um, came across a crazy statistic. $84 trillion with a T is going to change hands in the next 20 years.

Tim Ulbrich: Transfer. Yeah. Mm-hmm.

Julia Myers: trillion of that is going to millennials, but only 26% of parents feel confident their kids can handle it.

Julia Myers: So that illustrates and really [00:10:00] quantifies this disconnect is going to continue. We will be the statistic, we will be the fine print if we don’t create this vision. We all work for employers that have a shared vision. They have a mission, vision, and values, and it sits on the wall. Personally, we have those things that drive us, but what about when we come together as a family, and what if we say that is the most important reason of why we’re doing all this in the first place?

Julia Myers: It’s not to make your employer more money. It’s not to check your boxes to say, I lived a fulfilled life. It’s always in community, but those people around you, whatever your family unit looks like. That’s the hard work, but the easy work to skip over is creating that foundation, creating that like legacy that lives beyond you.

Julia Myers: What’s your family about? Who are you for? Um, I like to say when the founding fathers, we dust off the US History books. You’ve probably gone through it at least three times by now. Right. And we find [00:11:00] stories of how the constitution was built. It was not with this. Very specific moment in time created. It was actually like the three parts of, you know, the preamble.

Julia Myers: Why are we doing this? What are we doing and how do we keep it current? And when we look at that legacy that is the United States of America and all the things that come with that, almost 250 years later, it’s like that’s a legacy that lasts. We as families should want that too. We really should. And when I’m working with families, I find most of them when I’ll ask, you know, what are you doing to preserve your wealth?

Julia Myers: We know this wealth is shifting. We know we worked really hard and we don’t want it just to be squandered. What are you doing? Most commonly folks are saying, I have a trust. The trust is gonna take care of it. I have an estate plan and the quote that I use is that a trust [00:12:00] controls the money. A constitution controls the meaning, and you might be okay with just a trust, but it’s only as good as the people left to implement it.

Julia Myers: And so that’s, I think where we’re gonna really dive in today is say, what about is our family? Are we doing beyond those check boxes of the trust or beneficiaries? But what’s that vision? What’s that meaning? What’s the alignment that helps us say yes to the right things and no, to anything that doesn’t align with where we wanna go.

Tim Ulbrich: That’s a beautiful picture, Julia. And as we’ve talked about in the show before, those estate planning documents are, are incredibly important, but if they are missing the vision or the constitution as you’re describing it, we, we should really think about those estate planning documents as living underneath.

Tim Ulbrich: I. The vision, the constitution that we’ve defined, that’s the bigger vision. And the estate planning documents are, are an important piece of that. But it, it’s certainly not meant to be all encompassing. [00:13:00] And we, we talk about this at, at YFP as a part of our services, we do what’s called script your plan, which is the, the vision that we have, the torch that we’re gonna light for the financial plan because before we make any decision.

Tim Ulbrich: How much are we saving in our retirement account? Are we gonna pay down this debt or that debt? Are we gonna buy an investment property? Right? You, you name the, the list of decisions and choices we have before we make any one of those, which we often start there and go off and running without having a clear vision.

Tim Ulbrich: That’s where we find ourselves, I think 5, 10, 15, 20 years into the future. And we’ve been in this state of hurry and we’re like, time out. Where are we going and why are we going there? And sometimes we wake up to find out, hey, we’re on a different path than we really even wanna be on altogether. So just a word of encouragement for our folks that are listening.

Tim Ulbrich: You know, kids, no kids. As we talk about family, this idea of a constitution about a vision is such an instrumental part of the financial plan. And I’m gonna dig deeper [00:14:00] into what you have built called the Family Constitutional Framework. And we’re gonna spend a a decent amount of time here, and for folks that are just eager to jump in and kind of learn more, if you go to julia myers.com/constitution, you can learn all about this resource and what we’re gonna be discussing here.

Tim Ulbrich: Over the next several minutes, and we’ll of course link to that in the show notes. So, Julia, this family constitutional framework that you have, it begins with really identifying the core values.

Julia Myers: Exactly.

Tim Ulbrich: Why is this an important first step? And give us some examples. Help, help us understand what you mean by core values and, and maybe an example of what some of these are for your own family.

Julia Myers: Absolutely. And so when I think of values, I think of the foundation, the, the groundwork. So are we building a 4,000 square foot home or are we building a 400 square foot home? And the values you use to do one or the other, very literally need to be different.

Tim Ulbrich: Hmm.

Julia Myers: [00:15:00] When you combine, you know, parents, multi-generational family members, everybody together, different things are important to different people.

Julia Myers: And if we don’t know what we’re building and we’re not all united and on the same page, we’re gonna have, I don’t know what, who knows what it’ll look like? It’ll be abstract. How about that? It won’t be something that’s sustainable and that lasts, or that weathers the challenges that life throw at us. So two of the questions I like to kind of ask is.

Julia Myers: What matters the most to your family? And those are often emotions. And then also, what do you wanna be remembered for? Because do you wanna be remembered for the example of how hard you worked or how much overtime you did? Or do you wanna be remembered for being a coach on a sports team or being the person that you know volunteered in the parent room or the classroom?

Julia Myers: And so when we think about values. It’s really easy to say I want all of those things, but just like I tell my [00:16:00] kids, when you go to the library, you can’t check out all the books and you can’t check out the biggest book just because it says that it’s the biggest book, right? It’s gotta mean something to you.

Julia Myers: And so I, in our family, what we do as our values, and everybody can say this, so that’s the true litmus test, is not just writing it on the wall, but can everybody in your family articulate it? That’s the message of like, now it’s really working. Um, so we value, love, experiences and learning.

Tim Ulbrich: Hmm.

Julia Myers: So those are big buckets that love, meaning, love your neighbor, love your family, love your environment.

Julia Myers: Like love, right? And english means not as many things as it does in other languages, but it’s all encompassing experiences. For us experiences mean that we are prioritizing travel activities, events, um, and we’ll [00:17:00] spend money and time aligned with that and then learning always be learning. So it’s not necessarily just the formal education system, but it could be things that are continuously learning and continuously challenging and trying to find new things.

Julia Myers: So values for us, those are the three, but there are so many, you can pick from so many, like you could chat GPT, it. But in my resource, I’ve really kind of created some buckets to get you thinking of what are those words that you most identify with. Then individually, when you do those, you’ll find that sometimes you’re the same as your kids, but sometimes they’re so very different.

Julia Myers: And the value to me is having those conversations around, why did you pick this word and that word, there’s not a right or a wrong answer. It’s what best identifies our family. So what are your thoughts on kind of foundational values for family and maybe share some of your experiences or what you guys think.

Tim Ulbrich: Yeah, and I, I love how you built the [00:18:00] resources I was walking through. It. It, it gives some ideas, as you mentioned inside of the document, so people can come up with some of these words and it gives space. To allow each person in the family to come up with these words and then to have a conversation of, Hey, what are our family values?

Tim Ulbrich: And what I love about that is as we talk about where we started, generational wisdom, right? Generational wisdom implies that we’re beginning to build behaviors and habits that transcend just our family and are able to continue on to other generations. You’re role modeling. Whether the kid kids are five or 15, I know you’ve got kids that are a little bit older than mine, like you’re role modeling this behavior and activity that sure, maybe it looks a little bit different for their family in the future, but this is becoming a core foundation of how they think about money and the financial plan.

Tim Ulbrich: And I can see, as you’re describing, eventually your kids of leading their own families through a similar exercise. That’s what we’re talking about, right? Generational wisdom. Yeah. For, for our family, this, this is a, a [00:19:00] really powerful exercise and. Admittedly, we haven’t gone through, you know, the detailed level of what you recommended in the framework and how to think about it and come to an agreement and consensus on it.

Tim Ulbrich: But as you’re sharing here, I, we’ve talked about these at length before. In terms of the experiences, part is a, is a huge fundamental piece for our family. We love doing lots of things together, whether that’s going to watch one of our kids play soccer or baseball, you know, wherever we can. It’s not divide and conquer.

Tim Ulbrich: Which is a, which is a commitment. It’s, Hey, we are coming as a family to support one another, and we just love watching one another kind of enter into their unique gifts and their space. Um, so when you talk about like continuous learning and really optimizing, I. Your unique innate gifts. How do we as parents, help our kids identify what those are, and then how do we celebrate those as a family?

Tim Ulbrich: So those are some of the things that are really important, you know, to us. And admittedly, this is shifting as [00:20:00] well, right? Because when we talk about, talk about things like experiences and travel, well now that we have boys from five to nearly 14. This is a little bit more feasible than it was four years ago.

Tim Ulbrich: Right, and that was one of the questions I had had for you is when you’re working with families that are going through this exercise, thoughts on kind of the ages. Of the kids and what this might look like, right? I think about where your family’s at, phase of life versus my family, versus maybe others that have much younger kids.

Tim Ulbrich: And not only in that season, but also as that shifts over time. What? What are your thoughts on that?

Julia Myers: That’s actually a question I get a lot is like, how old do they have to be or should they be to participate in these conversations? And there’s a blend of an art and a science. There’s not an actual age, but if they’re little and they can understand sharing, I say that that’s at least a place where we can start.

Julia Myers: [00:21:00] Involving them in the conversation. But usually by the time they’re in elementary, they have passions. They have things they love doing. They have things they either wanna buy or things they wanna do. You ask a 2-year-old what they wanna do, and it’s probably a pretty limited scope, but by the time they’re in school and they’re about five, and maybe you see this with your youngest, it’s a new like developmental level that they can participate.

Julia Myers: And what do kids want more than anything in the world? To be treated like a big kid or to be treated like an adult. And so by pulling them into these kind of conversations, you’re establishing that that’s just part of what we do. Maybe we have a family meeting or maybe we have like a, you know, a family planning session.

Julia Myers: You know, those are things that they might roll their eyes out if they’re teenagers, but if you’re starting them young enough. They’re gonna be like, this is what we do. This is just normal culture. Um, so our youngest is third grade. She turns nine, her oldest turns 21 this month. And I would say that age appropriately, [00:22:00] they get more opinionated.

Tim Ulbrich: Mm-hmm.

Julia Myers: asking them, okay, what’s your opinion at five, it’s really easy to be like, oh, that was really sweet. But then at 15 you’re like, oh. That hits, or ooh, they have their own opinions. And so as parents, we’ve gotta be prepared to kind of pick something that lands for everybody in the season that they’re at.

Tim Ulbrich: Yeah, and this also, as you’re talking, Julia reminds me, just like we talk about in organizations, when you do a strategic planning exercise, it’s not a set it and forget, right? We’ve all, we’ve all been in organizations where you develop the strategic plan. It’s, it’s the beautiful three to five year plan.

Tim Ulbrich: Everyone’s super excited, the energy’s high, and then all of a sudden we check that box, it goes up on the, the shelf somewhere, it collects some dust. Then you have new leadership that comes in and three to five years later you reinvigorate the process and and continue on right with the cycles. And this is really an opportunity as we think about that similar approach in our families, especially as you [00:23:00] give the example of kind of a, the opinions and needs of a five-year-old versus a teenager.

Tim Ulbrich: If you develop something once, 10 years later, those opinions. Who’s under your roof, what that looks like as a family. This may shift over time, and sure, maybe there’s some core fundamental things that don’t change, but accounting for those needs, making sure that voices are heard, really to me, implies that, hey, we’ve gotta be looking at this as a living document on a regular basis.

Julia Myers: So I, I call it the, the three Ps that make up this constitution. So we talked preamble, articles and amendments is what kind of the government set up in the us. Um, so number one P. First P is principles. So we just talked about that. What do you stand for? That’s your strategic plan. Three to five. And then this second one second.

Julia Myers: P practices. What are your actions doing to match your beliefs? And that’s really where you get specific, you get granular. That’s where you go from, you know, [00:24:00] what are the systems that we use, how do we operate? You know, the parents do this or the kids do that. Or you know, every quarter we do some sort of a, you know, date night.

Julia Myers: With each of the kiddos. So what are those things and what’s the frequency that have those actions aligning with your beliefs? So that practices part absolutely needs to get changed because taking a five-year-old out is very different than maybe the 15-year-old or you know, college chores, whatever those expectations are.

Julia Myers: Or now that they’ve graduated, where do you decide to say, yes, this aligns with us. Both in money, both in our calendars, both in with our attention, and then where do we say no? Which I think as the kids get older, it’s that much harder because like what you said is there’s so many things we can do with our financial plan, but if we’re not bringing it back to what’s that end foundation, that end vision, it’s easy to get [00:25:00] off track or out of alignment.

Tim Ulbrich: Yeah, that vil, that vision is such an important piece. I think about it as a filter, as you’re talking about for making decisions, right? The yes, no decisions. Hey, if we agree on, on the vision, on the framework, you know, it’s often like I talk about with the individual budget, like don’t start with the budget, start with the vision.

Tim Ulbrich: What are the goals or the next one to two years, and then the budget is the way in which we’re going to achieve those goals. And the goals are, are ultimately the thing that we’re pointing towards. And as we’re going through that exercise, we need to have a filter to help us make some of those decisions.

Tim Ulbrich: So I love what you’re sharing there. What, what would you say, Julia, to a pharmacist listening who feels like their family is stuck and old patterns? Uh, you talked about mindset a little bit earlier or perhaps feels disconnected, kind of in that. You know, spinning wheel financially not progressing a whole lot.

Tim Ulbrich: It, it feels the dissonance, but maybe can’t put their thumb on exactly where, where that’s coming from. How, how can this [00:26:00] constitution, how can this framework really help them heal or, or realign in their efforts?

Julia Myers: Ooh, I love the vision pun. By the way, like I see what you’re doing. Um, you’re talking about vision and realignment, and I think it comes down to starting with you as the individual and realizing that what you’re building is bigger than you. And when we do things out of the service of others or out of that bigger vision, it sometimes puts things into context of the problems we’re having.

Julia Myers: Maybe weren’t our fault. The way we grew up with money, or the stress or the anxiety we feel aren’t our fault yet it is our responsibility today to decide how do we wanna look going forward, what do we wanna focus on? And I think there’s power in being able to decide where you focus. So the simple exercise that I do when I’m giving a keynote is, [00:27:00] you know, I say every time you blink.

Julia Myers: You get to decide what you’re focusing on. You have a glass, it’s half full or it’s half empty. Where do you, now that you know what you know, doesn’t change how full or how empty that glass is, but it does give you that power to be in the decision making chair. So able to then say, okay, I’m feeling disconnection, I’m feeling out of alignment, or I’m feeling just overwhelmed.

Julia Myers: What’s the next right step that you wanna try?

Tim Ulbrich: Mm-hmm.

Julia Myers: It could be checking out this resource. It could be telling your kids your very first money story, and it could be sitting with your partner or your spouse and kind of just saying, this is what I’m feeling and this is where I wanna go. What do you think?

Julia Myers: Because often, right, when we have employees that we work with or students or residents that are challenging, we’ll say, we always start with the shared vision. It’s like, where do we really wanna be? Any [00:28:00] problem that comes up is solvable or figureoutable, I think is a Mel Robbins

Tim Ulbrich: It is. Yep.

Julia Myers: that is, we’ve got this shared vision and we know that we wanna go somewhere.

Julia Myers: We wanna complete this residency, or we wanna land this job or finish this degree. Okay? Now that we’re on the same page, now we can take those next steps or those actions, and you don’t have to do it alone. It’s not meant to be done alone.

Tim Ulbrich: That is beautiful. Right, because as you were sharing that, I was thinking about, hey, where do we typically get stuck? Here, here we’re talking about relationally as it relates to the financial plan. But this can apply more broadly than that. And it’s when we’re, when we’re having different conversations and we don’t realize we’re having different conversations, right, because we’re missing that shared vision that we’re talking about.

Tim Ulbrich: And easier said than done. Uh, but, but I love. The vision that you’re casting here for, for why that is such an important place to start. The other thing I wanna go back to real quick to make sure our listeners don’t miss it, you said something really, really, really important from a [00:29:00] mindset perspective, which is, hey, once we can accept and understand that the approach that we take today, especially if I’m listening, I’m feeling stuck.

Tim Ulbrich: I’m not progressing financially. Hey, I’ve made a good income. I should be further along. The shame comes in, the guilt comes in, right? All the emotions, the fear with it, and it’s easy to get stuck in that space when we can recognize that often that comes from the experiences that we’ve had growing up.

Tim Ulbrich: Good, bad, and indifferent. take responsibility from that point going forward. To me, that is where everything changes. And it reminded me, um, one of the guys I file on on LinkedIn that I I like a lot is Sahil Bloom. And he, he just came out with a book called The Five Types of Wealth, and one of the things he posted this past week was, no one is coming to save you.

Tim Ulbrich: Your entire life will change the day you realize. It’s all on you. No one is coming to save you. No one will fix your problems. No one will change your mindsets. No one will hand you the things you want in life. It’s just you. It’s on you. There’s [00:30:00] power in that. And once that mindset shift happens, we’re, again, we’re talking about finance, but that is a much broader application.

Tim Ulbrich: There is such freedom in that and I think people can hear that. And there’s this for some maybe that that idea of freedom and I feel empowerment for others are like. Oh my gosh, that’s weighty. Right. But it’s so important, I think, just to sit with that and, uh, we would love to hear your reflections on that as well.

Julia Myers: I think it reminds us of when we’re a kid and we take the training wheels off the bike.

Tim Ulbrich: Hmm. That’s good. Mm-hmm.

Julia Myers: around you doing it, but until you actually do it yourself and you feel that discomfort and you break through to the other side, so like what you said, sit in that and feel that, that you are exactly where you’re supposed to be and you’re facing exactly what that challenge is.

Julia Myers: Because on the other side of that is gonna be that clarity. It’s gonna be another pun. Hindsight is always 2020. [00:31:00] If we look back in our careers, if we look back where we matched, if we look back at the mentors and people we’ve had in our life, they were all exactly there at the right point. And when did things change?

Julia Myers: When did you get unstuck? It’s when you stepped into that power that it’s you. It’s not what happens to you, it’s how you show up, and you can control that. Absolutely.

Tim Ulbrich: Julia, one of the questions I have is, is to get a step more practical and actually taking the time to sit down and do this and to develop this. Some folks might be thinking, Hey, this is just another thing to do. I. We’re a busy family. We’ve got lots of things going on and this really should, should be a sacred experience, but it, but it does take time.

Tim Ulbrich: There’s an initial commitment of time. There’s an ongoing commitment of time. What might this practically look like for families getting started in terms of that initial investment and, and any thoughts and re investment of time and any thoughts and recommendations you would have on the experience that is [00:32:00] created?

Tim Ulbrich: To develop this initial constitution, such as get outta the house right, and find somewhere else to do it.

Julia Myers: Yeah, I, you know, I’ve heard a range of options. I’ve heard the next time you’re in the car together on a road trip. Put your phones away, put your screens away. Might be hard to hear all the way in the back, but setting that expectation that, hey, we’re gonna spend some time and I just wanna talk and I just wanna hear you all share.

Julia Myers: It might be around a dinner table that maybe you hit at a restaurant and you kind of go in the back corner and you say, Hey, we’re gonna be here for 90 minutes. And usually having an end time to, it gives your teenagers permissions to roll their eyes and get it outta their system, and then they’re like, okay.

Julia Myers: I can do this for 90 minutes. ’cause that’s about as long as their longest period in high school.

Tim Ulbrich: It’s pro parenting right there, by

Julia Myers: yes. Yes. And so I’ve also seen it where a family wants to take a weekend to do it, or maybe Friday night they all go out and they eat and they talk about it and then they sleep on. [00:33:00] Does that still show up for me the next day?

Julia Myers: ’cause I mean, we’re humans, we have emotions, our priorities, you know, might feel really strong one day and then the next day you’re like, Ooh, I don’t know that. I wanna lean into that one. Um, one family I worked with, they put on that their values was fairness. I want everything to be fair and I want everything to be equal.

Julia Myers: And then the next day they kind of came back and were like, can we revisit that one? Because on the way home it wasn’t fair and nobody thought that that was a good idea anymore. And so I think it can be a commitment that you make, but also to yourself and to your family in the way that when you sign a job offer, you’re like.

Julia Myers: Other duties as assigned. This is gonna fall in one of those buckets that you didn’t know you needed. But at the same time, it is now that foundation that becomes more important than ever. So that would be that challenge, that limit or that belief, limiting belief that you don’t have the time to do it.

Julia Myers: You do have the time, you have to do it. And what are we gonna do [00:34:00] when we don’t have time? We’re gonna keep feeling stuck and we’re gonna stay where we are. And most parents listening to this show don’t wanna stay where they are. They’ve got visions, goals, aspirations, and this is one of those tools to help you get there.

Tim Ulbrich: Great point. We often look at an opportunity like this that there’s a cost to doing it, right? We, in our industry, it’s the same thing. There’s a, there’s a financial investment and a time investment to do the work. The question we don’t often ask, or at least not ask enough, is, what’s the cost of not doing it?

Julia Myers: Mm-hmm.

Tim Ulbrich: We have to look at both sides of this, and for me that that’s somewhat of a, I don’t know, maybe haunting, maybe liberating. I’m not sure which I feel, but when you think about things like this, the cost of not doing it, you know, again, I call it the rocking chair exercise. You wake up in 40 or 45 years, my kids are growing, they’re out of the house, hopefully grandkids, all those things.

Tim Ulbrich: Now, in theory, there’s more time, more money available than there perhaps ever has been. What are those things that while I’m in this [00:35:00] season in front of me, that are opportunities that we wanna make sure that we can take advantage of? Whether it be experiences, whether it be making sure we’re clear on the vision, the constitution of our family, the things that we’re talking about here today.

Julia Myers: I’ll also add that at stake is those statistics that 70% of your wealth that you’ve built is going to be gone by the second generation, and 90% statistically will be gone by the grandkids, the third generation. So that’s the cost of not taking action. That’s the cost of focusing only on the wealth and not the wisdom.

Julia Myers: And I’ve worked with a lot of families that still have kids on payroll at 24, 25, 26. What’s it costing you to have your kids still financially dependent upon you? And there are so many statistics, I can’t even keep up with them, about this middle generation that’s either financially supporting their parents and their kids, or that they don’t know that their kids will ever get off payroll. If that’s a value you [00:36:00] have, let’s do it. But if that’s an accident. Today’s the day. That’s your wake up call that you get to make a choice and you get to decide how do you want that to look?

Tim Ulbrich: Yeah. And those statistics highlight, well, the financial costs, there’s a whole nother layer of emotional costs, you know, that are involved in, in this as well. Julia, I’m, I’m curious to hear from your experience, whether it’s your family or others that you’ve, you’ve talked through with this. I. When it comes to completing the Constitution, to me there’s an important opportunity for celebration, uh, of, of that work.

Tim Ulbrich: What, what have you seen in terms of some of the rituals, traditions, celebrations that people have done that really marks the significance of, Hey, we’ve cast this vision that we have as a family and, and this is a commitment that we have ongoing.

Julia Myers: I think that goes to the third and final P of preservation. So how do you keep this alive? And in our house and in a few houses that I’ve worked with, they want a visual reminder. They want that framed on their wall [00:37:00] or put up kind of like a vision board where it’s subconsciously always there as a reminder.

Julia Myers: The goal is not to be interrogated by your in-laws when they come over because again, this is your family, not their family constitution. And so there’s different ways that people have done it. Some people have taken a vacation to basically say, Hey, we celebrate all of these things and we’re gonna do nothing but our values.

Julia Myers: I’ve seen people at the end of the year kind of reflect and look at it. So like that old practice of counting rolling coins, don’t make it sentimental, don’t make it that outdated practice. Make it something that is in the living, breathing, evolving document, and maybe ask and reflect. Sometimes at the end of the year, or for us with our teens, we do quarterly highlight reels.

Julia Myers: They pick the top five pictures from their quarter. And then we talk about it and we’ll say, are these aligned with what our values are? Or is this [00:38:00] out of alignment? And if so, what’s the gap? Because we all have seasons and we can’t always do everything exactly right, but we can say that from the lens of each of the kids’ perspectives, was that aligned or not?

Julia Myers: And having them be involved with the ownership of Take a Picture, what are your five favorite ones and why? How does that align with our values? You’re now reinforcing that behavior. You’re reinforcing those values. You’re also maybe shaking it up. So for us, we’ve done a lot of travel and we had a season where the kids were like, can we just chill more? And I’m like, I never thought about it that way. You know? And when we are traveling, just to always have something on the calendar that’s now missing the purpose of having experiences if we’re not getting that result. So did it get us to where we thought we wanted to be? Why or why not? Okay, let’s pivot.

Julia Myers: Let’s change, let’s do an amendment to say we’re not gonna do date nights every quarter. We’re gonna do them, you know, maybe every six months and they’ll be bigger or something. So just some level of [00:39:00] accountability to say, are we doing it? How often are we checking it? And what are those traditions we’re creating that are unique to us and meaningful to us?

Julia Myers: And giving yourself permission that just ’cause it’s a tradition doesn’t mean you always have to do it either.

Tim Ulbrich: Mm-hmm.

Julia Myers: ‘cause. There are lots of traditions that don’t serve us from our past. And splitting the holidays is maybe a good one that I think of is, you know, gone are the days of running around to 10 different places and you’re just present. You as a family get to decide that focus is power.

Tim Ulbrich: I think that message, Julia, is so important for, maybe I’m projecting a little bit here, but for, for pharmacists who, when we set a plan, by gosh, we’re gonna achieve every part of that plan to the detail we set out and there, and there’s value in that. But ultimately we have to ask the, the question, are we getting out of this what we thought we were going to get out of this?

Tim Ulbrich: And if not, are we willing to kind of pivot? Be flexible, review and, you know, look at some of these components in a different way. [00:40:00] So, great stuff that you shared there. As people think about this as a, as a living document, uh, that will be

Julia Myers: And the role model for the. Is important too, that the kids can see that you’re having conversations and you’re making pivots. We talk about we want our kids to be resilient. That’s a perfect way to teach it, is by amending that constitution and revisiting it for the reasons we just talked about.

Tim Ulbrich: So again, more information on this. You can go julia myers.com/constitution. We’ll link to that in the show notes. Julia, as we wrap up, uh, this has been incredible. I thought it would have, it’s delivered for me on, on every level, uh, as well. Love the work that you’re doing. Uh, where is the best place that our listeners can go to to learn more about you and the work that you’re doing?

Julia Myers: I would say my website, uh, Julia Myers, MYER s.com is where you can get plugged in. You can find those things that support you, that serve you. And if you’re on social, uh, LinkedIn is where I usually like to hang out, but I’m on all the other ones as well under Julia [00:41:00] Myers.

Tim Ulbrich: Awesome. Thank you so much, Julia, and I’m sure we’ll have you back on the show again. Take care.

Julia Myers: Thanks everybody.

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YFP 394: Crafting a Rich Life in Retirement: Insights from David Zgarrick, PhD

Posted on by YFP Media

Tim Ulbrich, YFP Co-Founder welcomes back David Zgarrick, PhD to share his journey into “preferment,” balancing retirement, financial planning, and staying engaged through teaching and consulting.

Episode Summary

In this episode, Tim Ulbrich welcomes back David Zgarrick, PhD, as he shares his journey into what he calls the “preferment phase” of life. Dr. Zgarrick opens up about his transition from academia to retirement, the joy of new routines, and the power of early financial planning. He highlights the importance of staying engaged—through consulting, teaching, and meaningful activities—while keeping financial health in check.

Key Points from the Episode

[00:00] Welcome Back, Dr. Zgarrick!
[00:10] The Preferment Phase Explained
[01:56] Living the Rich Life Today and Tomorrow
[05:11] The Importance of Early Financial Planning
[07:48] Navigating Retirement and Financial Management
[10:58] The Value of Community and Personal Fulfillment
[14:38] Staying Engaged Through Consulting
[38:33] Advice for Different Career Stages
[44:42] Final Thoughts and Wisdom

Episode Highlights

“ Dave, take a deep breath. You’re not going to run out of money. And here’s why you’re not going to run out of money because you never ran out of money before and you’re not, you know, unless you turn into some different person who starts spending money in a different way, you’re not going to run out of money.” – David Zgarrick [8:37]

“ One of the conversations that my advisor has been having with us is reminding us it’s okay to spend a little bit more money. It’s okay to, you know, go on that trip or do those things.” – David Zgarrick [9:49]

“ So long as I feel that sense of value I choose to engage myself. And, you know, on the other hand, there are places where I no longer feel that sense of value and I have made conscientious efforts to step away from those things.” – David Zgarrick [20:37]

“ Maybe one of the aspects of the transition that has been more challenging is, is feeling like you are part of something that is important or has a higher purpose.” – David Zgarrick [21:55]

“ I’ve come to realize that’s okay, because the people that I do have influence with, and the people that I am, shall we say, involved with, is a smaller group of people, but in some ways we have deeper and more meaningful types of relationships.” – David Zgarrick [23:44]

“ Nothing is forever. And you do want to make sure that you are taking the time to spend time with people who are important to you and to do the things that are important to you.”- David Zgarrick [43:37]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich: Dave, welcome back to the show.

David Zgarrick: Thank you, Tim. Good to see you.

Tim Ulbrich: Well, we had you on almost two years ago to the date, and that was episode 291. We’ll link to that one in the show notes. And one thing that stood out from that interview for me, David, that I have shared with many other people was your mention of shifting, not to retirement, but a quote, preferment phase after over 30 years in academia, quickly recap for us, what, what you mean by that, the preferment phase, and maybe what’s that looked like now, two years later.

David Zgarrick: perform it. And just to kindly borrow a phrase that many of, you know, Lucinda Maine. She was the executive VP at American Association of colleges and pharmacy. And I served on their board of directors for a number of [00:01:00] years, got to know, listen to many other folks at very well.

We send it. I were kind of on the. Same timeline in terms of making this shift. And she, and I know she, she heard this term from another fellow CEO of another professional association in DC same timeline that she did is there’s the sense that, you know, when it’s time to change paths, so to speak, it wasn’t that I was retiring, you’re totally stepping away and, you know.

Sitting back and not doing much of anything. It was the sense that I’m going to, um, I am going to in some ways step away, but I’m going to also remain engaged in doing things, particularly things that I really like to do and I value doing, and that was that sense of that’s where preferment came from. I’m, I’m doing things that I really prefer to do both for myself as well as things within our profession.

Um, And at the same time, um, you know, [00:02:00] not having the same schedules and the same demands that we did when we were, you know, working as part of other organizations.

Tim Ulbrich: When you say Dave doing the things that I really like to do and value to do, you know, we talk often on the show about the importance of yes, the X’s and O’s financially, but also finding that way that we can live the rich life today and tomorrow. And, and I think we’re saying the same thing in a different way.

What are those things? So when you think about the performance phase, we were talking about skiing before we hopped on the show, but what, what are those things that you’re, that light you up?

David Zgarrick: Well, you know, in some ways, you know, they start with the real basics that I think a lot of us have the routines, maybe that many of us enjoy. You know, it’s interesting as I’ve moved into this. Phase mornings, you know, your your regular everyday working phase mornings can be a very hectic busy time for many families and many people because you’re obviously getting ready to get up and go to work and all that kind of stuff.

In this phase right now mornings are actually [00:03:00] one of my favorite times a day because it’s I, I You know, it’s probably fair to say I ease into my mornings. I have never considered myself a morning person. I’m not one of those people that, you know, jumps up and goes on a 10 mile run and then goes off to work or something like that.

That was not me. Um, I get up, I. Do my Sudoku. I do several of the New York Times puzzles that, you know, the word, all the connections that that kind of stuff. Um, I have a cup of coffee. I eat my breakfast. I think about what I’m going to do. Um, you know, one of the things that preferment has meant for me is taking better care of myself.

Um, and so things like, um, am I going to go to the gym and do a workout? Yeah, I do. The weather’s nice. Am I going to go up for a nice bike ride? You know, those types of things. If it’s a ski day, am I, you know, yeah, I’ll get up and get ready to put my stuff in the car and head off to the mountain and go skiing and all that kind of stuff, [00:04:00] even though so those things I do in the mornings are not nearly as rushed.

They’re just. Basically doing the things that that means something to me in our value to me and, and, and, and, and fit well with, with what I want to do. So, so from a, from a very personal sense, you know, that’s, that’s a lot of what performant is, is meant to me.

Tim Ulbrich: Dave, what I love about that is I think sometimes when we think about retirement or what we’re calling here a preferment phase, we have these grandiose vision of these big things, these big experiences, which there is a time and place for

David Zgarrick: Yeah. Oh, yeah. Very much

Tim Ulbrich: But often, I, I think it’s what you’re talking about.

It’s, it’s the flexibility of the day and kind of how you spend your time. And, you know, you talk about investing more in yourself and kind of the pace of the morning. Like these are the things that when we talk about living a rich life, you know, that really resonates with me. Like, and by the way, like [00:05:00] those aren’t crazy expensive things.

Um,

David Zgarrick: no. Exactly. Exactly. No, no. It’s, you know, doing my Sudoku and the New York Times crossword and a wordle and those kind of stuff. Those are those are pretty inexpensive things to do, uh, you know, going down to the gym to work out. Yeah. I pay a little bit for a gym membership, but in the big scheme of things, that’s, that’s not a terribly high expense.

Tim Ulbrich: Dave, one of the things in our previous conversation that really stood out to me was your mention of how important the early planning was, the, the foundation bricks that you laid early in your career that allowed you to get to a point of financial security, allowed you to get to a point of having the option, right, having this phase that we’re talking about now that you’ve been in this season for a bit of time, how has that planning impacted?

Day to day. Right. We talk so much about the accumulation and getting to this point. We don’t talk as much about, well, what actually happens [00:06:00] when you retire

David Zgarrick: Those are great points because obviously you’re still planning. You’re still utilizing financial management and financial management skills. It’s it’s not like you get to the end of the road. It’s like, okay, I’ve got all my money and now I don’t have to do anything to worry about. You know, you still have to be engaged in in plan.

Um, you know, now probably more, you know, let’s just say this. I’ve always been engaged. Um, not just in saving money. I mean, I re I was reflecting on it. It wasn’t in our previous conversation, but I think you had posted this once. It’s like, you know, what’s, what’s your favorite fun way to spend money? You know, does every, everyone has a fun thing they like to spend money on and everything.

And I, I kind of answered that in a kind of a smarty pants way. But it’s like my, my favorite thing to do was actually save money. It made me feel good when I actually had some extra money that I knew that I could. And, and that was, um, you know, that sense of it’s going to give me options [00:07:00] down the road, you know, you know, whether it be maybe going on some fun vacation or something like that, or buying something that’s important to me, or, you know, being able to move into performance earlier than I probably had planned on doing.

And, um, you know, you know, having done that. You know, save that money really gave me those options, you know, spending money. Of course, you know, spending money is part of life. We all spend money and managing those skills, you know, the way you keep tracking your funds and the kinds of things you spend money on are things that I still pay attention to.

I still use Quicken, you know, all the time to basically track my expenses and, and keep tabs on what’s going on. Um, You know, I, I think it’s, it’s good to really remain engaged in that. I, you know, what, what I had a conversation with my financial advisor a few weeks ago, as we were going through, [00:08:00] you know, as we do most of the time, he goes to the Monte Carlo simulations of.

You know, how long is your money going to last under various situations and that kind of stuff. And, you know, his experience has been, you know, what, one of the things that most people who, especially people who retire relatively early, they, they do get somewhat, I don’t know if paranoid is the right word, but they’re, they’re concerned or somewhat overly concerned about running out of money.

Everyone thinks, Oh my God, I gotta be really, really careful. I’m going to run out of money. And my financial advisor basically told me, sit back, Dave, take a deep breath. You’re not going to run out of money. And here’s why you’re not going to run out of money because you never ran out of money before and you’re not, you know, unless you turn into some different person who starts spending money in a different way, you’re not going to run out of money.

I mean, yeah, maybe the markets go up and down. Maybe, maybe your resources become different. [00:09:00] You know what, you know what we all do in situations like that. We adjust, you know, um, you know, you know, one of the good things, I guess, about our lives. I mean, both myself and my wife were both pharmacists. So we were fortunate to have a fair amount of resources to be able to work with.

And when those resources are working with us, we’re. Enables us to do some really nice things, and that’s great. If, for whatever reason, those resources were not available to us, you know, we have a fair amount of, let’s say, discretionary in there, and we can certainly cut back on those discretionaries if we had to, and focus on, you know, what are the real absolute needs.

And, um, like I said, you know, I’m not really worried if anything, one of the. Conversations that my advisor has been having with us is reminding us it’s okay to spend a little bit more money. It’s okay to, you know, go on that trip or do those things. [00:10:00] Or, you know, our big thing this last year was buying a generator.

There’s an exciting way to spend. 20, 000, but you know, it’s, it’s actually something that was important. Um, especially given our, our move that we made over this past year, uh, moving from Colorado to Maine.

Tim Ulbrich: Yeah. And, and I’m glad you’re mentioning this, this behavior of learning how to spend on some level. Well, at the same time, like Dave’s not going to become a different person that got him to this point. Right. And I think that’s important that we objectively look at the facts, not only in the Monte Carlo simulation, but also in like, how have you gotten to this point?

David Zgarrick: Exactly, exactly. I, I got to this point because yeah, I, I, you know, saved money and I was judicious of how we spent it and, and I, I remained that way, you know, those things have not changed because I’ve moved into the performance stage. [00:11:00] Mm

Tim Ulbrich: about that because we had a really good brief conversation before we recorded about, you know, yes, it’s the X’s and O’s when we talk about retirement, but it’s also about. You know, community for many people and everyone’s plan is a little bit different.

And for some, you know, it’s, Hey, let’s get to the warm, warm weather and be a snowbird and that’s a good fit. Others, you know, we were joking. It’s, Hey, let’s get in the RV and travel and see the country. That’s a good fit. But for many other people, it’s, Hey, what, what is the sense of community and why is that important to us?

And I think your move to Colorado and then your move back to the Northeast is a really good example of that.

David Zgarrick: That’s that’s a great example of that. You know, I’ll go back in time, you know, two, three years, um, when we first started thinking about, you know, going down this path and my wife and I were having conversations about where did we want to be? It’s funny, you know, we lived in Boston for a number of years and, Had originally thought, yeah, we’re probably gonna end up in Maine somewhere in retirement and all that kind of stuff.

And we were out driving around one day and my wife was like, well, [00:12:00] why don’t we check out? Colorado is in Denver is placed to retire. And it’s like, I love to ski. That would be great. And we did. And so we made the move out to Colorado and, um. Let’s say, obviously, there are a lot of positives from about Colorado, especially from a skiing standpoint and being out in nature and all kinds of things, but but there were things that we really missed, too.

And I think that sense, you know, having been in particularly the Northeast for as long as we had, you know, there were there were a lot of things that we missed about the Northeast and and. You know, again, I consider ourselves very fortunate in that we, you know, we made this decision to move out to Colorado and then a couple of years later, we made a decision decision to move back and I’m glad that we did, that we, you know, didn’t feel locked into our original choice.

You know, we are happy, very happy to be back [00:13:00] to the Northeast. Um, we do have, you know, you know, community here, you know, between folks we knew in Boston and folks we knew in other parts of the mid Northeast. Um, we, we’ve had, you know, people come and visit us here. I mean, I, I was joking, you know, we, we had more people probably visit us in our first two months in Maine than we did in our two years in Colorado.

And, um, And, and so it was, it was just nice to be able to host people here. We did something here when we moved to Maine that we had not done. And my wife and I’s essentially 35 years of being together. And that was actually build a house. You know, the house that we are here in Maine is we, we worked with a builder and essentially designed and built something, you know, literally from the ground up, um, it was.

Kind of good. I feel very happy that we waited that long, you know, to do that. I know a lot of people build new houses fairly early on and that kind of [00:14:00] stuff. And, you know, sometimes, you know, it, let’s just say it helps to know what you want as well as to know what you don’t want when, when you build a home.

And that’s probably a conversation for a whole nother episode of your, of your podcast to people that are thinking about building homes and, um, You know what, you know what goes into that process. And I’d love to be part of that if you never want to go down that road. Um, but, but, you know, yeah, we moved here back to the northeast and built a home.

It took about a year to get that home built. But, you know, we’ve been here since last May and are really, really happy to be back.

Tim Ulbrich: shift gears, Dave, and talk about your decision to stay engaged in consulting work while your financial plan doesn’t require it. You just talked about your conversation with your advisor. It’s going to be okay. You, you’ve made an intentional decision to stay engaged in doing consulting work. Tell us more about that decision.

David Zgarrick: I’ll say [00:15:00] what part of it goes back to what we were just talking about with community and we have various different types of community. I mean, you know, for many of us, it’s our friends and neighbors and people that we knew in the areas where we lived and that kind of stuff, you know, a community.

That’s very important to me is is the higher education community, particularly the pharmacy education community. It was a very. Mm hmm. Important part of my, of my being for, you know, essentially 35 years and, and there are, um, many folks within that community that I’m still very much connected to, um, and I, and I stay engaged with them.

And now, in some ways that staying engaged is through doing little bits of teaching. I still, um, you know, have colleagues at various, I think this last year, I, um. Taught anywhere between one in six courses at six different universities. So, [00:16:00] um, you know, and much of that online. Some of it. Some of it. I actually did go, you know, visit campuses and that’s that’s I can’t begin to tell you how much I appreciate that.

I like. The teaching in person as opposed to, you know, what so many of us have done over zoom and all that kind of stuff over the pandemic. So, so getting back into classrooms and physically meeting with students. Um, other, you know, a couple of universities I’ve been working as a, as a consulting, doing some faculty development work, doing some leadership development work.

Um, again, it keeps me engaged and involved. Um, yeah. You, we and our listeners know that, you know, there are challenges and very significant challenges in pharmacy and particularly pharmacy education right now. And, you know, what, one of the things I recognize as a consultant is I don’t have all of the answers.

I don’t have a magic wand. I’m not, you know, bringing me in as a consultant is not going to make your problems go away. Um, [00:17:00] But, um, but what I do bring is a perspective. You know, I bring a perspective by bringing experience. Um, I can help others who are dealing with issues similar to what I and other experienced leaders have dealt with over the course of our careers.

And we, we share a little bit about what we’ve learned. And at the end of the day, I, you know, I, you know, especially when you’re a consultant, I, you know, I recognize Transcribed What I am and what I’m not, and you know, what I’m not is a savior. I’m not, you know, somebody who comes in and solves all the problems.

What I do bring is a perspective. And at the end of the day, you know, I take a step back and say, ultimately, this is your problem to solve. It’s not my problem to solve. I’ll, I’ll provide you with this information and this feedback and this help, and at the end of the day, you’re, you’re, you’re, you on your end, they’re going to decide what you want to do.

And, and that’s, I guess that’s another nice thing about being in the performance [00:18:00] stage of life is I’ve gotten very good at saying that’s not my problem.

Tim Ulbrich: Yeah. Yeah. Or here’s what I can do and I can’t do.

David Zgarrick: Here’s what I can do and here’s what I can’t do or won’t do. So, I mean, you know, one of the things from the teaching, I mean, I’ve made a conscious decision. I’ve had colleagues at other universities come to me and say, Hey, Dave, would you like to? Teach this course, you know, not just a lecture or two, but come in and teach an entire course.

And that’s something I’ve taken a step back from and say, no, I won’t do that. I don’t want to be in charge administratively of all of the aspects that are involved because because teaching a course is, as you well know, is so much more than just coming into a classroom and giving lectures

Tim Ulbrich: You’ve served your time there. You’ve done it. Ha ha ha.

David Zgarrick: Exactly. And, and that’s, yeah, no, that’s, that’s, that’s not an area that I, that I want to be involved in anymore. Yeah.

Tim Ulbrich: And your story is such a good one, Dave, for me, uh, and it’s an inspiration to me when I, when [00:19:00] I think about retirement, um, I don’t foresee a point in time, you know, outside of, of health concerns or something that doesn’t allow me to work of not doing, you know, something, money aside, you know, I, I just value.

That feeling of being engaged, of contributing, and it’s a two way street, right? So when you’re consulting with universities, whether you’re teaching or, you know, consulting, uh, with the leadership teams, whatever you may be doing, of course, you’re providing your experience and offering value. But that’s a two way street back to you of, of that sense of feeling of, of contribution and, Hey, you built a career and have gained these experiences and skills and to be able to share those.

Yes, you’re going to get paid for it as a consultant, but I would argue there’s, there’s perhaps even a greater value that comes from a sense of contribution.

David Zgarrick: Yeah. No, I mean, it all comes down to, I mean, I, I have a pretty simple mantra these days. I mean, I, I want to do things that I value and I want Okay. [00:20:00] What I do to be valued by others. I mean, and there’s all kinds of ways to define value. I mean, you know, there’s, there’s what one gets paid, of course, but, you know, there’s other things that you and I both do that, you know, maybe the sense of value isn’t in what we.

Get paid for doing, but it’s in how we’re making that contribution. And is that contribution important to yourself? And is that contribution important to the others that, that you work with? And, um, you know, so long as I feel that sense of value, I, I choose to engage myself. And, and, you know, on the other hand, you know, there are places where I no longer.

Feel that sense of value and I have made conscientious efforts to step away from those things. Um, you know, I, I don’t, you know, again, it’s, it’s, it’s a, it’s very nice being at a [00:21:00] point in your life where you don’t feel you to do something.

Tim Ulbrich: Yeah. Dave, I remember probably three months or so ago, you and I had had touch base. And one of the things you mentioned was how stark of a transition it was. To go into retirement where you’re no longer day in, day out, interacting with colleagues. Uh, and I know that shifted a little bit with the pandemic.

Maybe that was a, a, a, a little bit of an off ramp, you know, and, and reduced that. But tell us more about that. Was there anything else that really surprised you about the transition?

David Zgarrick: Well, I was gonna say, when I when I think about the transition, I mean, on one hand again, I think about mornings and working out and taking better care of myself and all those good things that I know that I’m doing a better job of now that I that I was doing before, um. Maybe one of the aspects of the transition that has been more challenging is, is feeling like you are [00:22:00] part of something that is important or has a higher purpose.

Um, you know, when we, most of us, when we work within our jobs or careers, we are working as part of organizations and there’s a reason we’re there. We want to be there. We want to contribute to, to something that we know is, is important. Bigger than ourselves, whether it be taking care of patients or, you know, educating students or, or doing the research that we’re involved in and that kind of stuff, we, we know that there’s that higher, bigger purpose to, to what it is that we’re doing.

And as, as you transition into retirement preferment, um, you know, you’re, you’re kind of stepping away from that. And, um, one of the things I, I had this realization a few months ago and, and. You know, we, we think about our spheres of influence and, you know, when I was, um, doing my work in higher education, you know, there’s a lot of value that’s put into how big [00:23:00] that sphere of influence is and, and how many people are you influencing?

What types of influence are you having on them, and that kind of stuff. Yeah, as I’ve, as I’ve made this transition, one, one thing you, you have to realize is, you know, for the vast majority of us, our, our spheres of influence are, if anything, becoming smaller as, as we step away, as we make that transition, I’m no longer, you know, in a position to, you know, influence as many people or, you know, make as many decisions that, that I had, um, previously, um, Um, And I’ve come to realize that’s okay, because the people that I do have influence with, and the people that I am, shall we say, involved with, is a smaller group of people, but in some ways we have deeper and more meaningful types of relationships, you know, the people that come and visit us here in Maine, the people that I go and visit [00:24:00] In, in other places and that kind of stuff, they’re, they’re the people that we have really made conscientious decisions about staying engaged and involved with, and I’m, I’m not going to name names here.

I mean, those people know who they are and I know who they are and we, you know, make very much, um, Decisions to to be part of each other’s lives. And I and I can’t begin to tell you how much I value those relationships. And I and I get the sense that those people value me. That’s that’s why they’re they choose to have me involved in their their circles as well.

And, um, again, I, you know, as we I’m now I I judge not so much about it. You know, what’s the number of people that I influence or the number of clicks I get or anything like that. It’s just how much do I value the ones that are really, really important to me.

Tim Ulbrich: [00:25:00] Yeah, what I’m hearing there, Dave, is, is depth over volume, right? Obviously in the,

David Zgarrick: much

Tim Ulbrich: in the role that you were in, you had a significant opportunity at the institution level, at the association level with your involvement to have a volume impact. And not to say you also didn’t have a depth of impact. Of course you did.

But here we’re talking about a more intimate number of individuals with an opportunity to go. Go much deeper. So that’s beautiful. I do want to talk about X’s and O’s for a moment. And you know, you, you retired at a time, as we often say that the time at when someone retires is one of the most important decisions are going to make.

David Zgarrick: it is.

Tim Ulbrich: There’s things that are out of our control sometimes, but there are things that are in our control. Like how have we prepared for entering into something like a volatile market? And while you retired into a market that has continued to overall trend up, it’s, it’s had its fair share of volatility. And so how have you planned for that in advance and how has that played out?

So that the volatility really isn’t impacting [00:26:00] you a whole lot.

David Zgarrick: You know, one of the things I’ll go back to it. I know this is something I touched on in the previous podcast is the important role of working with others, including financial advisors. There’s a tax advisor that I also have for many, many years. My tax advisor was actually my father. Father, um, my, my father, while he’s still alive and is still doing others, people’s taxes, I, I, I have a good laugh.

He actually dropped me as a client, uh, the, the, the, the year that my wife and I, um, had three different state tax, um, you know, taxes to filing in addition to our federal and, and move to from one part of the country to another part of the country, that kind of stuff, my, my dad said, you know what, I’ve had enough, you find yourself somebody with, uh, you know, who can help you deal with all of that.

The different things of that kind of stuff. And so it’s important to work with those things. I mean, we’re pharmacists, we’re smart people, we like to think that we [00:27:00] can do a lot of this work ourselves, and we do a lot of this lifting ourselves. But there’s also things that are Very, very helpful to get advice on that are not inherent to who we are, the kind of work that we do.

And I have certainly come to appreciate the contributions that our financial advisors add, um, farmer, um, that our, our tax person has had, um, you know, they, they keep me, they give me information. That’s, that’s very, very helpful. Um, so that you don’t necessarily have to, shall we say, worry about. A volatile market, you know, you know, the, the, you know, you know, starting with, let’s say, the value of having some cash sitting around.

So, so that, you know, one of the realities of life, of course, whether you’re retired or not, is you will have expenses and you will need cash for those expenses. And so how, how you deal with. You know, having that cash [00:28:00] and where that cash is and how accessible it is to you and those types of things that, you know, I’ve gotten very good advice over, over the course of the years, um, from the folks that I work with and, um, and they, they’ve really helped us, um, you know, not worry about, gee, the market went up.

2 percent the other day or down 3 percent the other day or something like that, you know, um, you know, I’m, I don’t worry about, gee, do I have to time that out or anything like that? I mean, yeah, timing is important and you always want to sell into an upmarket. So to speak, um, and, and so, so the good news is, yeah, making sure that you have a cash reserve set aside so that you’ve got the cash when you need it.

And when you need to raise some more cash, you can have the luxury of waiting until, yeah, the market’s doing a little bit better. Let’s, let’s sell off some assets now and, and then keep that back in our [00:29:00] cash reserves.

Tim Ulbrich: The, the visual that’s coming to mind for me, Dave, as you’re talking and thinking back to our previous interview is, you know, if we think about your nest egg. You’ve, you’ve built this bubble kind of around it, uh, to protect it and, and to give you some options and flexibility of if, or when you need to pull from it.

Right. It’s the cash on hand. Uh, it’s the consulting work that you, you’ve been doing, obviously the hard work and diligence that you’ve done to maintaining a lifestyle that you have, uh, some margin, you know, uh, month to month. And in two 92, you talked about, you know, what was your WTF fund and how your emergency fund.

That thankfully you didn’t have to pull from very much, was able to just grow, grow, grow. You didn’t borrow from it. And then eventually that became an important cash resource when you got into

David Zgarrick: is. And essentially it’s, you know, when we think about a nest egg, of course, you know, a nest egg is no one single, you know, asset for, for most of us. It’s, it’s a variety of assets. Um, it was the WTF fund. It’s our. [00:30:00] Base retirement savings funds. It was equity that we had in real estate and other types of assets for us.

There’s some, uh, life insurance assets in there as well. You know, there, there’s a variety of different assets and, you know. Good news is, I mean, we, you know, you know, we had retirement savings. We have not touched a single dime of those retirement savings yet. And that’s by plan. Um, you know, you know, we’re honestly the, the other assets that we had that allowed us to make this transition, you know, we’re, uh, you know, the, the plan was that we would have five to seven years of assets, um.

Set aside before we would even think about starting to utilize our retirement assets and, and that’s still very much the plan. Um, you know, we’re, we’re sitting here right now, you know, still, in essence, using the WTF fund to finance, you know, what our life is now. And in terms of. You know, real estate. [00:31:00] Yeah, we were able to make the transition from Massachusetts to Colorado back here to Maine, essentially working within the equity envelope of the real estate that we owned and still still work within that envelope.

It’s, you know, you know, making this move did not create, you know, additional obligations or additional expenses. You know, really, you know, we’re, you know, honestly, the cost of living in Maine is even a little bit lower than what the cost of living in Colorado was. So we’re, you know, probably even coming out ahead a little bit, even though we had, of course, you know, expenses involved in making that transition.

Tim Ulbrich: rename Dave, my emergency fund bucket, my WTF fund, because what I like about calling it that is it, it’s a mindset shift, right? Because when, when things happen, you know, I’m thinking about an issue we’ve got going on right now with our roof and, uh, you know, it’s those moments, especially when you’re working so hard on other goals that [00:32:00] if we have prepared for that.

And we can be somewhat lighthearted about it, which is like, that sucks, but let’s write the check and move on. That’s a totally different mindset shift than like, uh, like I’m so mad and frustrated.

David Zgarrick: I’ll go back to one of the things I mentioned a little bit earlier. I mean, my wife and I, it’s not exactly the sexiest or most desirable purchase that we made over the course of a year, but, but we, we made a decision to, to buy a whole house generator, um, for this house. And one of the things we learned relatively quickly after moving to Maine is the power goes out.

And the power may go out for days at a time and, um, and you want to be prepared for that. And yeah, one could go down to Costco and buy just a little generator that might keep your house, you know, keep something going or something like keep your refrigerator running or something like that. But that’s probably not what you really wanted to rely on or depend on.

Um, so, so we did buy a whole house generator [00:33:00] and yeah, there were expenses involved in getting the generator and having it professionally installed and all that stuff. But at the end of the day, I was, I was happy that, yeah, not only that we could do that, but we just had the resources to be able to do that.

Um, Going back to even the, the, the major decision about when to retire, you know, one, one thing I reflect on it, you know, most of us don’t, you know, it’s interesting. A lot of us think, yeah, I’m going to, I’m going to work at age 65 or 67. And, and if you do that, that’s great. You know, I, I, I think in, in our case, you know, we had just both gotten to a point where our, our personal values, let’s say we’re increasingly becoming different than those things that were valued by our employers and, and there was.

Not much that either of us were going to do to change how our employers actually did things. The only people we could actually influence or change were ourselves. [00:34:00] And, and the decisions we made was to consciously step away. Um, and, and we, you know, again, our ability to be able to do that was predicated by a large amount by the fact that we did have a fund set aside that set was, yeah, maybe originally was like, if there was some emergency pop up or something like that, like I said, we were very fortunate.

We never had that emergency. The fund kept growing. And at the end of the day, the fund was such that it It provided us with a bridge to be able to step into performance, maybe a bit earlier than, than either of us had originally envisioned. And, um, at the end of the day, I was really, really happy that we had that fun.

Tim Ulbrich: Dave, a subtle, but important thing I’m picking up on is the, the frequency of the we and our language. And I bring this up because I would remiss if I didn’t ask, you know, transitioning into retirement for couples. [00:35:00] It’s a household decision, and sometimes those timelines align, sometimes they don’t.

Sometimes people are on the same page. Sometimes there’s not. Uh, and everyone’s situation of course, is different, but any any wisdom you can shed there in terms of how you have navigated this?

David Zgarrick: terms of how we navigated it. It was interesting because I think for many, many years, my wife and I had actually quite different visions about how we were going to approach this. I, you know, retirement was probably something in retirement. Financial planning was probably fair to say a little bit more on my radar than it was on my wife’s.

You know, I. Yeah. My father was a good example for me in that he too retired relatively early age 57 and 27, 28 years later is still around and is still a retired still doing what he likes doing and is doing very well. And that was a great example for me. Um, I think my [00:36:00] wife originally was going to. Had every intention on keeping on working even after I took a step back.

Um, it’s fair to say then COVID happened and, um, you know, for all of us that work in healthcare and work in the healthcare fields, um, you know, that was a real seminal event. for a lot of people. And it was interesting, you know, while I as a college professor made this transition and was, you know, all of a sudden started working from home and doing zoom meetings and all that kind of stuff, um, which had its own set of challenges.

Um, my wife was a pharmacist at a hospital. Um, and as we all likely know, hospitals kept Working during the pandemic and those people that worked at hospitals kept on going in and, um, which, of course, had its own set of challenges. And I think going through those challenges, um, really. Change my wife’s mindset as well, [00:37:00] in terms of, you know, how much longer do I want to keep doing this?

And do I feel valued by, um, the organization that I, that I work for? And, um, you know, we, you know, as 2020, 2021, 2022 is happening. I think we both Increasingly, we’re on the same page that, you know, this, this is a good time to make a make that switch. And we, we know that there have been many others of us that have have joined us.

If anything, it has created, I’ll say one challenge in retirement and moving from one part of a country to another part. Now, back to this part is finding health care. Uh, we, we know that there have been many other health care professionals that have taken the last few years and have said, yeah, I’m going to step away.

And, um, that has, of course, created some challenges for a health care system that was challenged to start with in many ways. Um, and so, um, yeah, there is, [00:38:00] there’s been a challenge. It’s been, um. You know, getting health insurance, um, finding health care providers, getting appointments with those health care providers and all that stuff.

But again, that could be a whole nother show for another day. Okay,

Tim Ulbrich: I didn’t give you a heads up about this one, but I think it’s so important that we lean on your wisdom as we think about our listeners in different phases of their career. So Dave, I’m thinking about three groups.

Obviously everyone’s on their own path, but I’m thinking about those that are in the first five to 10 years, new practitioners, those that are in the middle of their career, and then those that are coming up on retirement. Uh, in the next five or so years. And so let, let’s start with those that are on that front part of their career, first five to seven years, new practitioners, they’re facing, you know, significant amounts of student loan debt, expensive phase of life might be starting a family, trying to buy a home.

[00:39:00] Getting started with investing, all these things. What advice would you have for that group?

David Zgarrick: Start early. Jump in. Don’t be afraid. I mean, yes, you you do have obligations, particularly student loan debt and everything that you that you are going to have to take care of and do take care of those things. But get into the habit of saving money being, you know, being mindful of how you spend money.

And that’s not to say don’t do things that you want to do. It’s not just It’s about taking care of your needs. It’s about, um, you know, having your wants and, and making sure that you’re taking care of those as well. But, but jump in, don’t, um, don’t get into, um, analysis or paralysis by analysis. Don’t, don’t, you know, basically say, oh my God, there’s all these things that I have to do.

And then at the end of the day, you end up not doing anything. Um, jump in.

Tim Ulbrich: How about those pharmacists, Dave, like myself and that midpoint of their career where, where they’re looking at retirement and it’s [00:40:00] still perhaps off in the distance, but they can feel it. It’s, it’s coming, uh, often in a very expensive. You know, phase of life, maybe, maybe the student loans are gone. Maybe they’re not.

Uh, you know, I think about our situation, uh, for, for kids in the house, expenses are, are high. We’re thinking about kids college where maybe perhaps some listeners, they’ve got elderly parents, they’ve got young kids or they’re kind of in that middle. What, what about advice for them?

David Zgarrick: Have a plan, develop a plan, and then let that plan work out. Uh, you know, one of the things that Really helped us was, shall we say, being able to save for retirement to do things without having to make a lot of day to day conscious decisions. I mean, you know, for example, you know, most of us work for organizations where we can set aside money.

And and have that money, you know, basically, you know, it’s going to go into certain pots and it’s going to work and do certain things and just so have a plan. Let it [00:41:00] do that. You know, don’t don’t necessarily. You’re right. We all people in the middle of their careers are have very, very busy lives and a lot of other obligations.

And so the less you know, the less that you have to even Think about, you know, financial management is probably a good thing at this stage of your life, yet still having that plan in place. I’m not saying don’t be engaged in financial management and don’t do these things, but but have a have a pathway or a plan such that, you know, try to make things as automatic as possible so that you don’t have to put a lot of day to day effort into into managing these things.

Uh,

Tim Ulbrich: well, like put the plan in place and then automate it so important and Dave, that final group, those coming up on retirement, maybe in the next five or 10 years about to make that transition. Yes, financially, but also for the things beyond the numbers.

What, what advice would you have

David Zgarrick: [00:42:00] you know, take some time to think about what you want your life to be moving forward. I mean, there is, you know, most of us are not in situations where we have to retire or step away at a, at a certain time at a certain date. Um, you know, and, you know, to those folks that are still really enjoying what they are doing every day, if that’s, if that’s what makes you, you.

Then then do that. Keep doing that. I guess in some ways, you know, when it comes out to have that conversation with yourself, what makes you you? What is it that that you really value and is really important? Is it time with your spouse time with your family time taking care of yourself? Um, your community?

Where do you want to be? Who do you want to be with? You know, ask yourself those types of questions and and then think about how do you make Those things happen. Um, I’ll say people in our age [00:43:00] frame right now is the ones that are getting later in our careers and so forth. Um, you know, we, we still have a variety of obligations.

We think about to, you know, one of the things that I think is very incumbent upon many of us in our age age, we’re, we’re fortunate in many ways and it’s that many of us still have parents around and so forth, but they are aging. And one of the things we see is my, my wife’s, uh, my wife’s mother passed away about a month ago.

And you’re constantly reminded of Nothing is forever. And you do want to make sure that you are taking the time to spend time with people who are important to you and to do the things that are important to you. Whether it may be take that big trip or go spend time with family or whatever, because, because you do realize.

You know, even though we plan for, yeah, retirement could be 20, 30, 40 years. Um, nothing’s guaranteed. Nothing will be forever. [00:44:00] And, and, and so I think as you approach, you know, moving into making that transition with the mindset of who do I want to be, what’s important to me, what are my values and then how do I live those values?

Um, You know, that that’s certainly been our mindset as, as we’ve approached, um, you know, especially the last two, three years. And, and I anticipate that’s what it’s going to be as we continue moving forward.

Tim Ulbrich: Dave, such wisdom there. We really appreciate you taking time to come on the show. I know you’ve been an inspiration to me and this is certainly going to be valuable to our listeners and our community. So again, thank you so much. And, uh, looking forward to following up in the future again.

David Zgarrick: Thank you. Thank you so much, Tim. Uh, again, you provide such a wonderful service to, to so many of us, um, in our profession and beyond, you know, there’s so many people that can benefit from the type of work that you do, and I’m just happy to be part of it.

Tim Ulbrich: Thank you, Dave. Take care.

[END]

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YFP 377: 10 Moves to Make to Become Financially Fit

Posted on by YFP Media

Gathering wisdom from his own journey and those of many other pharmacists, Tim Ulbrich, YFP CEO, shares ten moves that are key in building a strong financial foundation.

Episode Summary

YFP CEO and Co-Founder, Tim Ulbrich, distills the lessons learned from his own financial journey and from speaking with thousands of pharmacists about their financial plans into a list of ten moves that are key in building a strong financial foundation.

Whether you’re just getting started and have the opportunity to build a strong foundation from the beginning or you’ve been at it for a while and sense the need to reinforce that foundation, this week’s episode is for you.

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 to Build a Strong Foundation [0:00]
Commitment to Living Off Less Than You Make [4:05]
Building an Emergency Fund [5:59]
Developing a Plan to Eliminate High-Interest Debt [10:17]
Determining the Best Student Loan Repayment Strategy [12:07]
Tracking Net Worth and Understanding Insurance Needs [14:53]
Starting to Invest Early and Often [19:03]
Refusing to Accept a Fixed Income [20:04]
Implementing Systems and Automation [21:30]
Conclusion and Encouragement [24:51]

Episode Highlights

“As I truly believe everything else we talk about, right the X’s and O’s, whether it’s investing, insurance, debt repayment, tax planning, whatever it may be, all that stems from understanding and improving our own financial IQ.” – Tim Ulbrich [4:07]

“Life happens, and you want to be prepared. I want to be prepared so that those bumps don’t derail momentum and progress in other areas. The last thing we want is that we feel like we’re finally making progress towards building wealth, saving, investing for the future, achieving the goals that we’ve desired to achieve, and all of a sudden, we haven’t prepared for an emergency, and something sets us backwards and disrupts that momentum.” – Tim Ulbrich [5:00]

“Your six figure income – it’s a great tool, but it is not a financial plan. Without a vision and a plan, that good income is only going to go so far.” – Tim Ulbrich [27:51]

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 flying solo with an episode that is short and to the point. One that distills a lot of learning from my own journey and from speaking with 1000s of pharmacists about their financial plans. I’ve taken those experiences and narrowed it down to a list of 10 financial moves that are key in building a strong financial foundation. Think of these as the prerequisites to building wealth and living your rich life. So whether you’re just getting started and have the opportunity to build a strong financial foundation from jump street, or perhaps you’ve been at it for a while, and sense the need to reinforce that foundation, this week’s episode is for you. And if you’re looking to identify areas within your own financial plan that could use some love and attention, we’ve got a great free resource for you. We created a five minute financial fitness test so that you can learn about the areas of your financial plan that you may need to work on, where you’re doing well, and resources that can help along the way. So head on over to yourfinancialpharmacist.com/fitness and see how your financial health is tracking. Again, that’s yourfinancialpharmacist.com/fitness will also provide the link in the show notes.

Tim Ulbrich 01:25

All right, let’s jump right into our list of 10 moves to make to become financially fit. Number one on our list is be a sponge. Be a sponge. This is intentionally number one on the list as a consistent commitment to learning, I believe, is going to yield the greatest return on your investment. The earlier you learn, the higher the return on investment of your time. At most, some pharmacy schools offer a personal finance elective but the vast majority have little to no personal finance that’s embedded in the curriculum, whether that’s at the graduate or the undergraduate or even the K through 12, although we see that expanding more recently. While you don’t need a master’s degree in finance to be successful with your money, you should have the basic knowledge that helps you make good decisions and develop good habits. Read books, listen to podcasts, watch YouTube videos, whatever works for you. Some of my favorite personal finance books that have had the most impact on my journey include Rich Dad, Poor Dad by Robert Kiyosaki; I Will Teach You To Be Rich, by Ramit Sethi; The Millionaire Next Door, by Tom Stanley; Money: Master the Game by Tony Robbins; and of course, I’d be remiss if I didn’t mention the book that we wrote, Tim Church and I co authored, Seven Figure Pharmacist. These resources, as well as many other podcasts for me in my own journey, were instrumental to just developing that hunger and habit to learn, recognizing that there’s always an opportunity to grow, right? This is a journey. This is a marathon. This is not a sprint when it comes to long term financial success, and we have to put the work in to make sure that we’re upping our financial IQ over time. So be a sponge. When I think about some of the guests that have been on this show recently, right Brandon Gerleman on last week’s episode 376, that shared his debt free journey paying off about $160,00 of debt. Or Dr. Manny on Episode 375, a new practitioner that has opened up his own community pharmacy, is building his business. Or Mike Beyer from 365 who shared his story, going from a net worth of zero to becoming a Seven Figure Pharmacist. These are just a few of the stories, but one consistent theme and thread that I think of from their journeys is that they really believe there is no arrived. There is no arrive. When it comes to the financial plan, they are hungry to learn, to grow, despite the success that they have, they recognize there’s always an opportunity to learn, to improve and to grow. So that’s number one on our list. As I truly believe everything else we talk about, right the X’s and O’s, whether it’s investing, insurance, debt repayment, tax planning, whatever it may be, all that stems from understanding and improving our own financial IQ.

Tim Ulbrich 04:22

Number two on our list is make a commitment to live off of less than you make. Make a commitment to live off of less than you make. Outside of learning, outside of being a sponge, this is at the top of the list because other goals require cash flow. It’s that simple, right? If we want to pay off debt, if we want to save and invest for the future, if we want to invest in experiences and travel, whatever goals we have, they’re dependent on cash flow. And cash flow comes from living off of less than we make now, easier said than done. Many of you know that firsthand, but until we figure out ways to take off the cap on our income. We’ll talk about that here in a little bit. The cash flow will come from the difference between what you earn and what you spend. The financial plan is this simple and this hard right. Executing, of course, is the hard part. But without cash flow and without a monthly system, we’re going to talk about that here in a little bit as well. We’re going to find ourselves spinning our wheels financially long term, right? We want to implement a system that from the breathing room and the cash flow that we create, we’re able to fund our goals each and every month, and know that we have a process in place for those goals, the dreams that we have to become a reality. So that’s number two on our list. Make a commitment to live off of less than you make.

Tim Ulbrich 05:48

Number three, you’ve heard me say it many times on the show before, build an emergency fund. This is not just about the dollars in the account. It’s about the breathing room that this creates in your financial plan, getting out of the day to day, month to month, year to year, mindset, and ensuring that we can have the peace of mind. So if you haven’t already done this, open up a high yield savings account or money market account that is separate – keywords – separate from your checking account, and label it as your emergency fund. One of these, my partner, Tim Baker, often says is, hey, if you’re doing the mental accounting, do the actual accounting. What does he mean by that? He means that if we’re looking at our funds, let’s say you’ve got 20, 30, $40,000 that’s sitting in a high yield savings account, or perhaps in a checking account. Hopefully not the case. But if we know that, hey, about five or 10 of that is for an emergency fund. About five or 10 of that is for an upcoming trip, about 10 of that is for a future roof replacement in the home, right? That’s the mental accounting. So if we’re doing that, let’s create the buckets here. We’re talking an emergency fund, label it and do the actual counting of putting it in a fund that is earmarked specifically for the emergency fund. Now we’re going to want to work towards saving three to six months of essential expenses. That’s our goal. That’s our target, general rule of thumb. But don’t let that number overwhelm you if you’re just getting started, or perhaps you’re doing some cleanup work in other parts of the financial plan, because here’s the reality, if you’ve never had an unexpected car or medical expense or another emergency, it’s only a matter of time. Life happens, and you want to be prepared. I want to be prepared so that those bumps don’t derail momentum and progress in other areas. he last thing we want is that we feel like we’re finally making progress towards building wealth, saving, investing for the future, achieving the goals that we’ve desired to achieve, and all of a sudden, we haven’t prepared for an emergency, and something sets us backwards and disrupts that momentum. Now here are five questions that I think you need to answer for your emergency fund, just to get you started and hopefully to get you on track. Number one is adequately funded. We talked about that general rule of thumb, three to six months of essential expenses, not all expenses, essential expenses. So what does that mean? Housing, food, transportation, clothing, minimum debt payments, things that you would continue to fund, even in the event of a short term job loss or emergency add those up. Multiply them by three to six. That’s a general target we’re shooting for with an emergency fund. So that’s question. One, is it adequately funded? Number two, a problem, but a good problem to have is, do you have too much saved in an emergency fund? I’ve talked with several pharmacists that have done a great job saving, but big numbers in an emergency fund, and ideally, we would put these funds, probably elsewhere, to use in the financial plan now, right now, because of where interest rates are at, it’s not a terrible option to have money sitting in an account earning four to 5% in high yield savings account. But if we have other high interest rate debt, or we’re looking to build up our long term investing or savings, there is an opportunity costs that can come from having too much saved in an emergency fund. So that’s question two. Number three, are you optimizing your emergency fund? So what I’m talking about here is making sure it’s not sitting in a checking account, that we have it working for us, especially with where interest rates are at right now. Whether that be a high yield savings account or money market account. You know, right now, at the time of this recording, most of those are in the four to 5% range. So are we optimizing that fund. Number four is, does it need a boost? So this is something that we can set it but forget it, and we have to come back and look at this, right? So, you know, especially for those that are earlier in their career, where expenses creep at a rapid rate, right? Perhaps when you when you graduated, maybe you didn’t have a home, or you didn’t have a family, all of a sudden you wake up in 3, 4, 5, years, our expenses have gone up significantly. So we want to visit this, revisit this at least once a year, and maybe at one point you hit that target of three to six months. But do we need to look at it again? And finally, our fifth question here. Is, as I mentioned already, is it separate from our everyday checking account? Right? If we’re doing the mental accounting, let’s do the actual accounting. So that’s number three on our list, build an emergency fund.

Tim Ulbrich 10:11

Number four on our list of 10 moves to make to become financially fit, develop a plan to eliminate any high interest rate revolving credit card debt, or any high interest rate revolving consumer debt. Now, if you don’t have any revolving, high interest rate consumer debt, credit card debt, high interest rate, car loans, etc, great, right? Let’s move on. But if you do, baby steps, baby steps, this, along with the emergency fund, is really a top priority, given the interest rates this debt often demands, right, especially when talking about credit card typically north of 20% we have to plug this hole before we can start playing offense with other parts of the plan. Now, I know that sounds obvious, but I see this mistake commonly made, where because student loan debts there’s there’s an emotional burden there, or because there’s a feeling that I need to catch up and save and invest for the future, we can often get these priorities mixed up, right? So if I have high interest rate credit card debt that’s accruing interest north of 20% but I’m paying down debt at 5% 6% whether that be student loans, or I’m trying to save and invest in various retirement accounts. I may have those out of order, right? So we got to look at that. Now. Last thing I want to say here is, if you have credit card debt, know that you aren’t alone. Okay? We often think that, hey, all my other pharmacist friends have this figured out. They’re making a great income. I’m the only one with credit card debt, I can assure you that is not the case. This is a fairly common struggle that we see, especially with new practitioners. Although others are not immune to this, but there’s a lot of expenses that ramp up in that final year of pharmacy school, or those that transition into residency or fellowship. High cost of living areas. There’s a tendency to accrue some credit card debt at the end of that training program. So know that you’re not alone doesn’t mean or minimize that we have work to be done. Of course we do, but you aren’t alone, and we got to really start to begin to tackle this. So that’s number four, develop a plan to eliminate any high interest rate revolving consumer debt.

Tim Ulbrich 12:15

Number five is we have to get clear on determining what is the best student loan repayment strategy for you. Now, if you’re listening and you have no student loans, you’re further along in your career. Great. Keep moving on, right? But for those that do have student loans, this is often a huge piece of the puzzle that we have to figure out, given the magnitude of it so that we can then plan around it. Because what you’ll notice, if you’re not already aware, especially when it comes to federal student loan repayment, there are a variety of options that can result in either big, big, big monthly payments or much smaller monthly payments, depending on which repayment plan you choose. And so we have to understand what fits into the budget. What is ideal, what is optimal for your situation, so that we can then plan and budget around it. Now, the median debt load for a pharmacy graduate here in 2024 covering right around $160,000 and for many grads, this is one of the most important and overwhelming decisions that they’re going to make. And to be fair, this is way more complicated than it needs to be, both on the federal and the private side. For those of you that have private loans. And to make that worse, this is just a hot mess right now, right. There’s a lot of changes that are going on with student loan repayment, a lot of uncertainty. The Save program has been held up. We don’t know what’s going to happen with that in the future. And by the way, we’re in the midst of a presidential election where student loans are often discussed and used in terms of political jockeying, so there’s a lot of unknown, which means for a lot of borrowers, it’s kind of a wait and see. Right now, it’s a wait and see for many people. So if you’re not already plugged into Studentaid.gov, make sure you get plugged in. We’ll link to that in the show notes so that you can stay up to date. We’ll also try to bring information here on our channels with what’s happening with student federal student loan repayment. But again, given the size, given the magnitude, notice, I didn’t say debt free, and I was intentional there, because for some of you, this is going to be a loan forgiveness pathway. But what I did say is we have to get clear on what our strategy is. We don’t want to be wandering when it comes to how we’re approaching our student loan. So once we can determine what is the optimal repayment strategy, we can then figure out what does that mean for a monthly payment. And then, as I mentioned, we can begin to build around that. So that’s number five, determine your student loan repayment strategy. Number six is, start tracking your net worth. Start tracking your net worth now if you’re early in your journey, especially if you have student loan debt or credit card debt, you’re not going to like this number, right? Because it’s a number that’s going to highlight especially if we have a high amount of debt that hey. We make a good income, but we’re probably not at the point we would like to be in terms of our overall financial health. Net worth is your assets or what you own minus your liabilities or what you owe. And I believe this is a much better indicator of your financial health than is your income, right? Because your income a six figure income. It’s a tool, but it’s not a financial plan, and it’s a tool that we can leverage to grow our net worth by paying down our debts and growing our assets that are hopefully compounding over time, but net worth is really going to shine a light on are we or are we not making progress. And so understanding and respecting this calculation can propel your financial plan. I really think about this as the 20,000 foot view on what’s going on for Jess and I in our own financial plan. So this is something that we’re tracking monthly. Very easy to do. I’ll share with you the template that we use. If you go to your financial pharmacist.com/toolbox. You’ll see a network tracking sheet there. You can save a copy for yourself, edit it. Nothing complicated. You can set up your own sheet as well. It’s a simply a listing of all the accounts that we have, checking savings, retirement accounts, real estate accounts, etc. Add up all the assets, subtract the liabilities. Amount that’s due. That’s our net worth. We’re tracking that over time to make sure that we’re heading in the right direction. If you’re not already doing this, even if you don’t like the number implement a system a recurring task to track your net worth each and every month. That’s number six on our list of 10 moves to make to become financially fed.

Tim Ulbrich 16:36

Number seven is determine what insurance policies you do and do not need and do not need is perhaps equally as important. And while there are a lot of different types of insurance to consider here, I’m talking in specifically about three that I see get overlooked most by many pharmacists: professional liability and having your own professional liability insurance policy independent of your employer. Term life and long term disability. With the latter two, term life, long term disability, we’ve got to be thinking about what coverage we need in addition to what our employer policies are providing, not only to plus those up if they’re not enough, but also we got to remember that those policies aren’t going with us when we transition jobs, right and so as time goes on, as we get older, these policies typically become more expensive. So if we can lock these in in terms of our own independent Term Life policies, long term disability policies, while we’re younger and we can get the coverage we need, that’s probably going to be the best action that we can take. Now, when it comes to long term disability, you put a lot of time, energy and effort to be able to become a pharmacist and make a good income, and that’s why it’s so important to protect it. Disability Insurance for pharmacists is really income insurance. It’s addressing what would you do and the event that you’re unable to work as a pharmacist, right on the term life insurance side, what we’re trying to do there is especially if we have dependents or someone else that relies upon our income, in the event that you were to prematurely pass away, and that income is needed. What is that term life insurance policy going to produce? What expenses is it going to cover both short and long term now, we’ve got more information and resources on all of this. You can check those out at our website, yourfinancialpharmacist.com, I’ll link to a couple resources we have specifically on term life and long term disability in the show notes; guides that we’ve written specifically for pharmacists, what you do need, what you don’t need. Make sure to check those out. That’s number seven on our list. Determine what insurance policies you do and do not need.

Tim Ulbrich 18:54

Number eight is we have to start investing as early as we possibly can. Now I know we’ve all been told this, but again, as with many of these items easier said than done, because when you’re flooded with things like student loans and other debt, it can be hard to balance prioritizing investing, and it’s easy to fall into the trap and perhaps feel that you can put off retirement savings for a few years, but the reality is that you want to take advantage of compound interest, time, value of money, and the earlier you start contributing, the better. And your investing strategy, it’s going to evolve over time. It’s going to get more complicated. But don’t succumb to inaction, because you’re overwhelmed with all the options. Start typically, what we’re focused on is starting with the employer match to a, 401K or 403B, 401 k, for those that you work work for a for profit, 403B for those that you work for a non profit, assuming that you’re there long enough to be vested, that’s a key factor we have to look at. And then we’re going to build from there, right? We’re going to look at things like IRAs Traditional and Roth IRAs, typically. Roth IRAs for pharmacists. HSAs health savings account and other investment vehicles along the way as well. We have talked extensively on the show about various investing strategies, long term retirement plan strategies, so make sure to check out those episodes for more information.

Tim Ulbrich 20:17

Number nine on our list of 10 moves to make to become financially fit is refuse to accept your income is fixed. Now, common misperception I see among many pharmacists is that there is a ceiling on their income, and that mindset can lead to stagnation. Stagnation. It can lead to career dissatisfaction, and it can really limit on what is possible. So whether it’s pursuing additional opportunities within your organization, or perhaps for some of you, it’s starting a side hustle or business or investing in real estate, these are just a few of the many examples of how pharmacists are taking the ceiling off of their income potential. Bob Berg, the author of the Go Giver, said that your income is determined by how many people you serve and how well you serve them. I believe that to be true, whether it’s people that start their own business, whether that’s people that get started in real estate and develop great collaborations and partnerships, or whether that’s folks within their own organization that really are able to demonstrate and provide the value that then unlocks additional opportunities for them. So that’s number nine, refuse to accept your income as fixed because,

Tim Ulbrich 21:25

as we talked about earlier, all financial goals stem from the cash flow that we create by living off of less than we make. One way to do that is cut expenses. The other way we’re talking about here in our ninth point is growing our income.

Tim Ulbrich 21:37

And finally, number 10 on our list of 10 moves to become financially fit, implement systems and automation as soon as possible. Now, if you’ve listened to the show for a while, you know that I love automation, and Ramit Sethi he talks about this in his book, I Will Teach You be Rich when he says, and I agree that automation can be the single most profitable system that you ever build. And as you’re getting started, it’s the process, not the outcome. It’s the process that’s most important. Remember, this is a marathon, not a sprint, and building and automating a system is ultimately what’s going to allow you to identify and fund your goals. You are directing your financial plan rather than reacting to it. That’s what we’re talking about here with automation. And it’s so apparent, so effective, so easy to implement, but it’s vastly underutilized. It involves essentially scheduling the transfer of funds to predefined goals, and doing so confidently, knowing that you’ve already accounted for it in your monthly spending plan. That’s what we’re talking about with automation. So whether it’s paying down your debt more aggressively through extra payments, whether it’s saving and investing money to an IRA or another type of investment account, whether it’s putting money towards a down payment on a home or investment property, whatever the goal is that we’ve identified and we account for in our monthly spending plan, once we identify that goal, automation, the next step here is to move those funds after we get paid, rather than waiting to see if there’s money left over, right? It’s proactive versus reactive. Sure, it takes a little bit of time to set up, but once it’s set up, it provides a long term return on your time, benefit and peace of mind, knowing that you have thought about, you’ve prioritized and you have a plan that is working itself to fund your goals. Do not underestimate how powerful that can be in terms of momentum and confidence. Now, what does this actually look like? So for my wife and I, we have a high yield savings account. We use Ally for all our online banking, this is not commercial for Ally, but in our high yield savings account within that, we have various buckets, and we name them according to the goals that we’re setting out to achieve. Now, of course, if there’s anything that I want to go directly to an account, not to sit in a high yield savings account, right? Perhaps this would be funding a Roth IRA or a brokerage account, or putting money into 529, those are going to be automated directly to that account. But for anything else, as I mentioned before, the mental accounting and the actual accounting, for example, this year we’re finishing, right now, a basement remodel project. So we have a bucket in our high yield savings account for a basement remodel. It could be a vacation. It could be the next car purchase. It could be gifts that you are funding throughout the year. It could be your insurance, homeowners or auto insurance that you pay once a year, twice a year, that you save up through throughout the year. Right? Any of these goals, we can create a bucket, and we can automate the contribution of the funds to that, and then we can see, and have a visual representation of what our goals are, and whether we’re not or not, we’re on track to achieve those. So this system, it took us about 15 minutes to set up, and could just as easily be achieved, probably through your own bank, or if they don’t have a bucket tool like that, through tracking in a simple spreadsheet. Again, resources I have that you can see more of our system. You go to yourfinancialpharmacist.com/toolbox, feel free to download any of those templates or resources and make them your own.

Tim Ulbrich 25:06

Now, if you’re someone that’s listening, that’s feeling perhaps financially stressed or stuck or overwhelmed or confused or anxious, whether you’re a new practitioner, mid career, approaching retirement, or maybe you’re wondering, why am I not further along? Right? I’ve earned a good income, or I am earning a good income. Why am I not further along? I want you to close your eyes for a moment, unless you’re driving, of course, don’t do that and imagine a scenario where you are regularly investing in time to enhance your financial IQ, whether that’s reading, podcast, whatever you’re consistently learning and growing in this area. I want you to imagine where you have a fully funded emergency fund, where you have the peace of mind knowing that you have a backstop in place. I want you to imagine a scenario where if you have any high interest rate revolving debt, that that’s gone, and for other debt, you have a plan in place for how that’s going to be paid off and where that fits in the budget. I want you to imagine a scenario where you’re regularly tracking your net worth over time each and every month. I want you to imagine a scenario where you’re saving and investing each month and hopefully growing that each month, taking advantage of compound interest and time value of money. I want you to imagine a scenario where you’re advocating and negotiating for your income to be commensurate with the value that you’re providing and the confidence that can come from that. And I want you to imagine for a moment that you have a system in place that is accounting for and automatically funding your goals each month. And as you imagine those things. How does that feel? What emotions are coming up, and how does that contrast against those feelings of feeling stressed or stuck or overwhelmed, confused, anxious, notice that there is nothing complicated about what I have shared today. Sure, there’s a time and place for more advanced strategies, many of which we have talked about on this show, but first we have to do the foundational work that will put us in the position to take some calculated risk. And this just this isn’t just new practitioner stuff, right? I know many pharmacists, myself included, that sometimes we have to go back to the foundations, whether we’ve been out five years, 15 years or 25 years. And while all of this is pretty straightforward, you and I both know that executing consistently over time is a different challenge. So let me wrap up by saying that if you could use some help and guidance, we have a team of certified financial planners and tax professionals at YFP that can help. Your six figure income. It’s a great tool, but as I’ve said already once on this show, it is not a financial plan without a vision and a plan that good income is only going to go so far. That’s why, in part, I started Yfp back in 2015 because at Yfp, we support pharmacists at every stage of their careers to take control their finances, reach their financial goals and build wealth through comprehensive fee only financial planning and tax planning. Our team of certified financial planners and tax professionals work with pharmacists all across the country and help our clients set their future selves up for success while living a rich life today, both are important. So if you’re ready to see how yp can help support you on your financial journey, you can visit your financial pharmacist.com, and at the top right, you’ll see an option to book a discovery call that will take you to a scheduling page to book a meeting with my partner, a 60 minute meeting. Tim Baker, fee only, certified financial professional, where we’ll talk and learn about your situation, your goals, what’s working, what’s not working. We’ll share more about our services, and from there, we can determine whether or not those are good fit again, yourfinancialpharmacist.com, at the top right, you’ll see an option there to click on book a discovery call. Thank you so much for listening to this week’s episode. If you found this information helpful, do me a favor. Share this with a friend and colleague and leave us a review on Apple Podcasts which will help others find the show. Have a great rest of your day, and we’ll catch you again next week. Take care.

Tim Ulbrich 29:14

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 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 analyzes 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 358: Top 6 Financial Moves to Make as a Mid-Career Pharmacist

Posted on by YFP Media

YFP Co-Founder and Director of Financial Planning Tim Baker discusses six financial moves for mid-career pharmacists, including re-evaluating the vision for the financial plan.

Episode Summary

Tim Ulbrich is joined by YFP Co-Founder and Director of Financial Planning at YFP, Tim Baker to discuss various financial planning strategies for mid-career pharmacists, including resetting the vision for the financial plan, prioritizing retirement planning and emergency funds, and reevaluating, reviewing and updating insurance policies.

Regularly reviewing and adjusting these funds to account for the various life changes ensures that policies align with current financial goals and circumstances. Tim and Tim also address the importance of having those uncomfortable conversations, such as end-of-life care and inheritance to avoid potential legal and financial issues in the future.

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), three kids (Olivia, Liam and Zoe), and dog (Benji).

Key Points from the Episode

Financial moves for mid-career pharmacists, including resetting financial goals. [0:00]
Financial planning, goal setting, and prioritizing life ambitions. [3:54]
Emergency funds and savings goals, including rechecking amounts and locations. [9:17]
Emergency funds and retirement planning for mid-career pharmacists. [14:34]
Retirement planning and nest egg calculation. [16:46]
Social Security benefits and retirement planning for pharmacists. [22:43]
Updating estate plans for mid-career individuals. [29:13]
Financial planning for aging parents. [33:39]
Financial planning for mid-career pharmacists, including insurance checkups and estate planning. [37:48]
Insurance planning for pharmacists, including long-term care and property casualty assessments. [41:17]

Episode Highlights

“And I think the other thing is that things change. I think checking up on your financial plan is really, really important.” -Tim Baker [5:08]

“I think it’s really important to kind of recast the vision, recast the organization of your financial plan and go from there.” – Tim Baker [5:52]

“I think one of the things that I would challenge people who are mid-career, from a goal setting perspective is, are you doing the things that make you whole or that you’re passionate about?” – Tim Baker [6:28]

“So, you know, I think being critical and actually like slowing down and saying, is this what I want to do. And then using the resources, the time that you have, the dollars that you have, to kind of right that ship, and because again, we’re here for a very finite amount of time. And it goes by quickly, and it sounds very cliche, but it’s true.” – Tim Baker [8:08]

“I typically say that the estate plan is really important, really, for anybody, But particularly for people that have a spouse, a house, or mouths to feed. So if you have those things, and you don’t have documents in place, I think that that’s probably the biggest thing that we need to look at.” – Tim Baker [32:58]

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, Tim Baker joins us back on the mic to talk through six financial moves to make as a mid career pharmacist, we discussed the importance of resetting the vision for the financial plan, how to determine whether or not you’re on track for retirement, gaps to look for in your estate planning and insurance coverage, and much more. For more information and details on each one of these areas, go to yourfinancialpharmacist.com/midcareer. That’s one word again yourfinancialpharmacist.com/midcareer.

Tim Ulbrich 00:37

Before we jump into this week’s episode, I have a hard truth for you to hear. Making a six figure income is not a financial plan. Yes, you’ve worked hard to get where you are today. Yes, you’re earning a good income. But have you ever wondered, am I on track to retire? How do I prioritize and fund all of these competing financial goals that I have? How do I plan financially for big upcoming life events and changes such as moving, having a child, changing jobs, getting married or retiring? Or perhaps why am I not as far along financially at this point in my career as I thought I would be? The answer may be that your six figure income is not a financial plan. As a pharmacist, you have an incredible tool in your toolbox: your salary. But without a vision and a plan that good income will only go so far. That’s in part why we started Your Financial Pharmacist. At YFP, we support pharmacists at every stage of their careers to take control of their finances, reach their financial goals, and build wealth through comprehensive fee-only financial planning and tax planning. Our team of certified financial planners and our CPA works with pharmacists all across the country to help our clients set their future selves up for success while living their rich lives today. If you’re ready to learn more about how Your Financial Pharmacist can support you on your financial journey, visit your financialpharmacist.com/learn. Again, that’s your financial pharmacists.com/learn. Alright, let’s jump into today’s show.

Tim Ulbrich 02:05

Tim Baker, good to have you back on the show.

Tim Baker 02:07

Good to be back. Tim. How’s it going?

Tim Ulbrich 02:09

Good. It’s been a while official congrats on the baby. I know you’re off for a little while. But we’re glad to have you back on the mic.

Tim Baker 02:17

Yeah, thanks for thanks for hosting, it’s trying to get back in the swing of things with baby here. Sleep’s at a premium. So, it’s all good.

Tim Ulbrich 02:28

Well, this week, we’re talking about moves that mid-career pharmacists should be making things that they should be thinking about. And really whether someone is early in their journey, you know, these are things to be thinking ahead of or those that are actually in this season. Hopefully, this is more of a checklist type of episode where you can go through different parts of the financial plan, or perhaps tune up or look back at some of these items. Tim, it dawned on me though, as we’re preparing for this episode of like, that’s us mid-career, you know, it’s really that that phase where you start to feel like, Hey, we’ve kind of checked off some of those basic foundational items. But there’s this whole other set of issues and things that we need to be thinking about going into the future. So for better or for worse, here we are in the middle of our career, as well. And we’re excited to talk through these six moves that mid-career pharmacists should be making in each one of these we have covered at length, if not once, maybe twice, or three times on the episode before. So we’ll make sure to mention that when we get to these individual items and link to those things in the show notes as well. Tim, I think it makes sense that we start number one, really with the goals. You know, this is an opportunity, I think to reset the vision for the financial plan, there often is a lot of transition that can be happening at this phase, you know, this might be the time where people have kids are getting a little bit older, maybe beginning to think about them moving out of the house, we obviously have to be thinking about taking care of ourselves. Maybe we have elderly parents that we’re trying to prioritize as well. So just a lot of transition, I think an opportunity to take a step back and really look at the vision and the goals for the financial plan and how those have changed over time.

Tim Baker 04:05

Yeah, I would package these, I would actually package this together with like, what is the balance sheet look like? And then what is the vision going forward? So you know, we kind of look at this, you know, when we work with clients as a get organized and kind of a goal setting, you know, as a one two punch, and this is typically where, Tim, when a pharmacist asked me a question of Hey, should I do X or Y? I say it depends. A lot of it depends on what is what is the financial picture look like for you? And then what does a wealthy life look like for you both today and in the future. And for everyone that’s going to be different. So, that to me is where that answer comes from. So yeah, like I think in prepping for this episode, Tim, I kind of learned you know, two things or realized two things that I think is really important to say out loud. One is just like a lot of stuff when I was looking at my you know, I was looking at my insurance stuff in my in my nest egg calculation, some of the things that we’ll talk about in this episode. It’s just a lot of moving pieces. And it’s a, and it’s changed a lot over the years. So that’s, that’s the first thing. And I think the other thing is, like, you know, this thing, things change, I think having, you know, checking up on this is really, really important. So, when we look at, like, the, when we look at the balance sheet, again, if you haven’t looked at your balance sheet in a long time, I think it’s really important, it’s not necessarily necessarily something that we feel in our day to day, yeah. But if you, you know, if you if you put your head down, and you’re working, and you’re raising a family or doing whatever you’re doing, and, you know, two or three years later go by, you can actually see the progress that, you know, has been made, right, so you can see, you know, how your assets, you know, been built up, how have you How have your liabilities been paid down? Or not, you know, do you have a different set of, you know, versus if it’s was it student loans in the past the past and now its a HELOC, or something like that. So I think it’s really important to kind of recast the vision recast the, you know, the organization of your financial plan and go from going from there. From the vision perspective, it’s, it’s laughable when you think about, you know, like, when I, you know, had these conversations with myself and my wife, you know, even three or four years ago, and then what that looks like today, like, like, and you don’t sense that, but like, when you when you actually look back, and you kind of memorialize, hey, in 2019 pre-pandemic, this is kind of our viewpoint, this is what we wanted to do. And then we look at that today, it’s vastly different. So I think, like, you know, one of the things that, that I would, you know, challenge people that are mid career, you know, from a goal setting perspective is, are you doing the things that, like, make you whole, or that you’re passionate about? You know, like, I was joking around with my team over the weekend that I kind of felt like an Uber driver, because I was driving to soccer practice and swim practice, soccer practice again, and swim practice again. Which is great, like, I love that I love you know, you know, you know, seeing my kids, you know, do well on their sports and their activities. But, you know, though conversation that I had with my wife over the weekend was like, are like, Are we are we good? Are we on like the track that we want to be on and kind of checking in with and sometimes that’s a check in with yourself, some that’s a check in with a spouse, sometimes it’s a check in with like, a close advisor, like a financial planner. And I think it’s really important to do that, because again, you can put your head down, and you know, live, you know, be living your life, but then, you know, you’re doing that vicariously through your kids or, or whatever, and not actually take the time to do the things that you’re passionate about. And sometimes, you know, again, your own goals. And ambitions are kind of taking a backseat to your kids, which is a it’s a natural thing. But at the end of the day, like there typically is enough to go around, like we can carve out time, we can carve out resources to do the things that you want to do whatever that is. So I think it’s really important, you know, as you are mid-career, and I think this is where, you know, people like to talk about, like a midlife crisis, because they kind of get caught in the rat race, and they’re like, this is not really the life that I want to live. So, you know, I think it’s that, you know, that self, you know, being being critical and actually like slowing down and saying, is this what I want to do. And then using the resources, you know, the time that you have, the dollars that you have, to kind of right that ship, and because, again, we’re here for a very finite amount of time. And it goes by quick, and it sounds very cliche, but it’s, it’s true. And I think you can I always talk about this, like, you know, that whole that sense of being on autopilot. I’ve worked at jobs where, you know, like, my commute to the office in the morning was in darkness, I would you know, I would drive there 30 minutes, I wouldn’t remember that drive, and then you back was in darkness, I would get in my car, and 30 minutes would go by and I’m home. And I don’t remember any of that. And that’s, that’s like an analogy for life is that if you’re not actually slowing down and think about is this what I want to do that’s important. So that’s just my life planning hat. You know, are we are we putting the first things first are we doing, you know, the things that we want to do and making sure that we’re, we have a plan and we’re being intentional for that.

Tim Ulbrich 09:16

I love the example you gave of you know how for you and Shay, your family, right short period of time, the goals can look very different, and why it’s so important to be looking at these regularly and talking about them together to have a third party, you know, kind of help, whether that’d be a plan or someone else. I was even thinking as you shared that, you know, for Jess and I, when you did the planning with the two of us how helpful it was when we would get together to flash up the goals to say, hey, yeah, a year, a year ago, you guys said this is important. Like, is it still important? If so, like, what what are we doing? What are we doing to kind of move this forward? And ultimately, like, where are the funds, right? If it requires funds to do that, and that’s so important. You know, you and I had a very similar season of life where, you know, to the point you gave of the weekend and being the Uber driver We’re like, the days and the months are flying by to really have that mechanism to stop, pause, slow down and remind ourselves of like, are we running the path? Are we running the race that we want to be running? And we’re not gonna get it right all the time, right balance in every season of life, but to have some built in mechanism to not just set those goals, but also to refresh and to look at those periodically.

Tim Baker 10:23

Yeah, absolutely.

Tim Ulbrich 10:24

All right, number two on our list is savings. And we’re gonna talk about a few different areas. Here. We’ll talk briefly about the emergency fund, and an opportunity to recheck where we’re at with that, we’ll briefly talk about retirement. Again, we’ve talked about all these at length, we’ll reference other episodes, and then we’ll touch on some kids college stuff as well. Tim, let’s start with the emergency fund and a recheck. I just talked on Episode 357, last week about five questions that we need to be asking ourselves related to the emergency fund. So make sure you go back and check out that episode. But I think this is one of those areas that where we set the emergency fund maybe early on in our career, and then we don’t think about, wow, a lot has changed, we really got to relook at is the amount that we have there sufficient? And how does this fit in with the rest of the plan?

Tim Baker 11:09

It’s one of those things where yeah, it’s kind of a forgotten, forgotten thing. And, you know, you know, what we really want to do is check in and make sure that you know, what’s in there is appropriate, and, you know, are there things that we can do to, you know, to, to improve it. So, you know, for for a emergency fund, what we’re looking for is three to six months of non discretionary monthly expenses. So these are expenses that are gonna go out the door, regardless of if we work or not. So things like, you know, a mortgage and insurance premiums and utilities and a food bill. So, unfortunately, we tend to get to that number, we have to actually look at spending data and understand like, what that looks like, and then, you know, we kind of look at, you know, what is what is discretionary? What are things that are non discretionary, and we add up all the non discretionary if we have, you know, two incomes, we multiply that by three, if we have one income, we multiply that by six for six months, and then and then that’s our number. For a lot of our clients. You know, it typically can be I think, in a, I would say, anywhere between 15 and $50,000 is what is what the number is, um, so I think like, you know, and this is something that that Shay, I looked at recently, and I think, for us, because of three kids and you know, daycare and all that kind of stuff, it’s, it’s crept up, and I’ve kind of tried to, you know, the interest that I that I accumulate in my high yield, or I do, I do a combination of a high yield savings account. And then like, a laddered CD that I do every quarter, like a year CD for every quarter. So I have a q1, q2, q3, q4 that I just renew, and I kind of let those ride and I’m actually adding more money, both to the high yield, and the, and the CDs as we go here. But I, the only reason I knew to do that was to actually look at the spending, and it’s kind of crept up, you know, just because of family of, you know, probably the last time I did it, we were a family of three, now we’re a family of five. So I think that’s important to do. And again, like, there are so many people that I talked to that they’re like, Okay, this brokerage account, this, this taxable investment account, that is my emergency fund, that is not an emergency fund, it’s, it’s, you know, if you’re investing in it, and you can see volatility, that’s not what we’re trying to do. So I think having you know, the right amount, and then the location is going to be really important. And to get the right amounts, typically, looking at the budget where you’re at today, and again, like I don’t look at the kids swim or, or soccer or other activities as a discretionary as a, that’s, that’s a discretionary thing. So if times get tough, we, you know, try to try to cut that. So I think even, you know, examining what is, you know, what should be in there and what shouldn’t, is important, but, you know, to me, it’s, it’s a little bit of nails on chalkboard, right Tim, because I don’t want to keep cash, I want to get that into the market and get work. And so I need enough to get us through a tough spot. But then also know that, you know, for me, I want to get money into mortgage and a lot of people typically, you know, later in mid career and beyond, they’ll they’ll start because they have an asset like the house, they’ll even use something like a HELOC as like an even deeper reserve. Yeah. So to have access to a HELOC, or something like that is going to be important that I’ve seen people use as a mechanism to, you know, to safely and I wouldn’t say cheaply because of where rates are, but somewhat cheaply access cash if needed, and not necessarily tie up a ton of money in a checking error, high yield savings account, I should say.

Tim Ulbrich 14:33

I like the hack that you mentioned. And yes, I do the same thing where you know, any any earnings on a high yield savings, we just kind of dumped back in the emergency letter, I let it ride right. And the idea being that’s going to help kind of keep pace at some level with inflation, maybe not fully, but to your point, it doesn’t cover those big jumps, right. So like now we’re a family of five instead of a family of three or, you know, we bought an investment property and we’ve got to be thinking about that or we moved homes and you know, mortgage payments went up and so those kind of big moves, where all of a sudden, you know, that emergency fund might go from that 15 to that 30, 35. Are we looking at that periodically.

Tim Baker 15:09

And for you, Tim is probably like your food bill, right? Oh, pre preteens? Like, like, that’s gonna that’s that’s like No, that’s no joke, you know like when you, even Olivia. Olivia is going to be 10 this year and she’s a swimmer. I mean, she eats I feel like as much as I do. And you know, when you when you think about that, that’s, that’s gonna move down quite a bit. So you know, it’s it definitely adds up. And at the end of the day, the emergency fund is there for that rainy day when, when when you need it and just making sure that’s properly funded is going to be important to kind of give you that peace of mind.

Tim Ulbrich 15:42

The second part of savings Tim, I want to touch on as we work through these six different moves for mid-career pharmacists is, you know, I think this is a natural time where we ask ourselves, Am I on track with retirement? Right? And, and this is a season where when we talk with pharmacists mid-career, you know, the visual I have is you’re getting hit in every direction, right? You maybe kids expenses, kids college has grown, we’ll talk about that a little bit. You’ve got this pressure facing you on retirement, you might be caring for elderly parents, you know, perhaps there’s debt still hanging around, we’re working through student loans or other things. There’s, there’s all these different pressures and headwinds, and naturally, that retirement piece made maybe wasn’t a top priority for a while. And all of a sudden, we get to this point where previously we couldn’t visualize retirement now we can start to and it’s like, Am I on track? And I know, we covered this in Episode 272. How much is enough? We’ll link to that in the show notes. So people can dig deeper, but just at a high level, you know, some some tips or some thoughts for folks that are asking this question of, Hey, am I on track? How much is enough? When it comes to retirement?

Tim Baker 16:45

This is such a, this is such a hard one. Because like, I’ll ask like prospective clients, like, Hey, do you feel like you’re on track to meet like your goal for retirement? And if you’re talking to someone in their 30s 40s 50s? I would say even in your 50s, it can be somewhat nebulous anytime it’s like a decade or more out. And typically, that the answer I get is like, you know, Tim, I really have no idea. Which is, I think, problematic, especially if we’re trying to, like, you know, build out a plan. So that’s obviously something that we can fix. But also, it’s kind of that default of like, well, like the 401k, you know, company or the 401k that I have, they have a calculator that says I’m on track. And I’m like, I just don’t know how they calculate that. And I almost feel like, all the compliance things that, Tim, that we have. So it’s almost like irresponsible, yeah, to, again, they’re looking at it very much from it, but people don’t necessarily know that, you know, it’s very much a vacuum. I think that like, the problem with like, Am I on track for retirement is that there’s so many variables that go into it, there’s so much time that goes into it, you know, and I always talked about this, like, when we, when I first started working as a financial planner, I remember working with my previous firm, and it’s like, you know, we would do financial planning by hand, and we would do a time value money calculation. And we would say, Hey, Tim, hey client, you know, your, your, your, what you need for retirement is $3.1 million. And we’d be like this exact number. And then we’ll kind of go on to like, the next thing, I’ll make sure you’re doing this. And it’s like, it just never connected. It was almost like this disassociated moving, because you’d like to look at like what the client had, which might be three or $400,000. And you’re like, I need to, like 10x this in 20 years, or 15 years. And there’s so many people that come back to me that when they start and then they’re like four or five years, they’re like, like, damn, Tim, like, actually, my assets I’ve actually grown like, I almost didn’t believe you. And it’s still hard to even to see that, you know, the progress to get to that, that millionaire level. But I think it’s really important. And so like, I took that, as a financial planner, I would look at the clients, like their eyes would kind of like gloss over because they’re like, that doesn’t mean anything to me. And I can’t we build up this nest egg calculator that basically goes through. And I did it recently for Shay and I, you know, what’s your current age? What’s your target? You know, so how many more years do you have left in the workforce? How long do you expect to live? Which is again, that’s one of the hardest, you know, that’s one of the risks in retirement is like longevity risk, like, are you gonna live really long or not? So again, that’s a little bit of a crapshoot. So we kind of make make some assumptions there. Social Security kind of has an idea of when they think that you’re gonna pass away, what your current retirement savings is with kind of think of it as your present value and your time value money. And then what your current calculate your current income is and then what that kind of projects into what you need for retirement. So we make some assumptions on how is your current assets actually invested? So for a lot of people that I see at least it’s in my opinion, too conservative, especially mid you know, if you follow the rules of thumb of, hey, if you’re, you know, if you’re 40 years old, you take 110 minus 40, your equity, equity amount should be 70%. And then the other 30 should be in bonds, I think that is wrong. But then we do some, you know, asset assumptions when you’re actually in retirement, so might be more conservative. And that kind of gets down to the total need. And then you have to factor in things like social security. So I pulled my Social Security, I think we’ll talk about that in a second. And then like, what does that mean, in terms of what do I need to actually save today? So it’s, it’s the idea here is to take this big number, whether it’s 3.1, 3.6, 2 million, 4 million, and actually break it down to a number that I can digest. So like, if you say, if I’m, if I’m the client, and I say, hey, you know, if I’m talking to a client, I’m like, Hey, you’re putting in 10%, for you to actually get on track to retire by 65. To live to 95, whatever that is, you need to go from 10% to 15%. Like, I can track to that. And also, you know, so that actually is a tangible thing, that’s a, that’s a digestible thing that I can do versus just saying, we need $3.1 and we kind of just are like, it’s a hope and a prayer, right. So it’s not, it’s not a perfect system. Because like, when I look at my own nest egg calculation, you know, I’m maxing out my 401. K. And let’s assume that I’m going to be doing that for the next 29 years, if I retire at 70, which, that’s a, I don’t know, I don’t know if that’s going to be the case. I’m hoping that’s the case. But so there’s, there’s, there’s some assumptions that we have to make to make, to make it kind of come to life. And I think the next level of this, Tim, was kind of going through some simulations. So if I were to, you know, if I were to, you know, take part of my portfolio and purchase x, or if I were to, you know, go and go down to part time, or, you know, do something else, you could actually run scenarios, if I, if I buy my Mountain House 10 years earlier, there’s some Monte Carlo analysis that will actually affect, you know, show you how it affects your success rate with your with your retirement. And I think that’s kind of the next level stuff. But for a lot of people, it’s where am I at? What are the things that I’m that I’m doing today? How can I tweak those things to get a better outcome, and that could be contribution rate, that could be my allocation, that can be a variety of things. So I think that’s important to kind of break down and really see, you know, because the more the longer that we wait to kind of effect change here, especially if it’s negative, the steeper that gets, right. So when you’re, when you’re early in your career, you know, a tweak here there can really have monumental changes, the closer you get to that retirement, just the the steeper that climb is and the harder it is to kind of meet goals. And that’s where you have to start, then potentially taking a haircut on lifestyle and retirement, or you know, the amount of time that you have to work etc.

Tim Ulbrich 22:43

What I love about the nest egg exercise is, you know, going through it for Jess and I, again, just a reminder, with all these things, we’re told it’s not a one and done, right. So if you do a nest egg when you’re, you know, 45, there’s assumptions, we’re building into all of these types of calculations, both in terms of the mathematical assumptions, but also what you want. And you know, you mentioned the different scenarios, and that can change and probably will change over time. So revisiting this periodically is so important, but it really moves I often hear people talking about retirement as like a hope, wish or dream, meaning like, I hope I can retire by 58, or 67, or whatever, or, you know, I would love if I could potentially work part time at some point in the future. And it’s like, hey, yes, those assumptions can change, many of them will change over time. But we can put a number to these into your point, let’s get it down to what do we need to be doing on a monthly basis, because these numbers do seem scary. And you can see, kind of the peace of mind that comes when you walk through these calculations with people when you start with those big numbers, three, four or 5 million. And then you get down to that monthly even if we don’t love the monthly number, when we factor in employer matches, other things, savings we already have. We’ll talk about social security here in a moment. It’s like, oh, okay, like, we can work with that, because we can put our arms around it and start to figure out, can we build that into the rest of the planet, a monthly basis. So, so important, especially for those who are mid-career listening. If you’ve done this before, you know, revisit this, you know, we’d love to have opportunity to work with you on the financial planning side, if you haven’t done it before need to revisit this as well. But something we definitely need to be updating. And looking at periodically. Let’s move to number three, which is really looking at our Social Security benefits and the projected benefits, which I think fits so well into the how much is enough calculation. And, you know, this is an opportunity to really look at our [email protected] to look at our statement, our projected benefits. I think a lot of people probably aren’t necessarily familiar with these tools that are out there. And to begin to figure out and build some assumptions of, hey, if I have social security benefits, what might those be? And then certainly we can project down if people are worried about the future of the benefit. I’m sure you’ll talk about that as well. But thoughts here on on kind of revisiting or looking at the social security piece?

Tim Baker 24:57

So if you go to ssa.gov Like if you have haven’t done this, I would encourage you, especially if you’re mid-career just to kind of see what your social security statement looks like. So to me, that’s really important to kind of get a sense of, and again, like, I think a lot of people, when they, when they think about security, it’s kind of an eyeroll of like, uh, that won’t be there, when I’m when I’m ready to retire, or it’s going to be greatly diminished. You know, I would, what I believe is that, you know, Social Security is one of those things where so many people rely on it to actually survive in, you know, it’s kind of a hand, um, you know, unfortunately, we’re kind of like a hand to mouth in terms of like, a lot of people don’t do a great job of saving themselves, especially, you know, no offense to Baby Boomers, where there was pensions and things like that pensions, and Social Security could go a long way, in terms of retirement, that day is done, you know, so when we moved away from pensions, and more to 401k, the onus has really shifted from the employer to the employee, to make sure that we’re doing what we need to do. And again, social security still there. But there’s lots of, you know, press about, you know, will be viable, and, you know, will it go bankrupt? My sense is that, you know, it will be there, Tim, when we retire it at 70. But it’s kind of one of those things where it’s, it’s unknown what that benefit would be, and again, maybe when we retire, you know, it’s not 70, it’s 75, or something like that, because of a variety of reasons. But the I think the big thing here is to pull your statement. And then when I look at mine, it actually shows me, you know, what my personalized monthly retirement benefits would be, if I started from age 62. So right now, my my benefits $2,076 or if I wait until age 70 and actually get the, you know, credits $3,777. The big thing with Social Security that doesn’t get enough play is that it’s inflation protected. So when we had that big jump into inflation the year before last, yeah, everyone’s payment went up, I think 8.9% or whatever it was your over a year, that’s huge. Because if you’re thinking about, you know, building a retirement paycheck, most of the things that you have, most of the income streams are not inflation protected. So every time, you know, we go through bouts of inflation, you’re you know, you know, the checks, the checks that you have running it coming in, are not going to account for the fact that, you know, your your grocery bill went from 100 bucks per month to $140, just because of where that’s at. So Social Security, you know, plays a part in that. So I think the big thing here is to try to check, you know, when you pull your statement, you can actually see your work year, and what your earnings tax for security were from, you know, I’m looking back from, like, 1991 to present day. So I think to make sure that that’s accurate, that’s, that’s going to be a big thing. And again, like, I think the sooner that you can kind of look at this and kind of get a sense of where you’re at. And then and then look at the you know, look at the the the retirement calculator that’s there, you know, if you if you retire early, versus if your full retirement age, you know, for us, it’s going to be 67. Or if you delay it out to age 70, which to me, I think a lot of people should really look at doing and if you have a plan, you know, before the kind of the knee jerk was like, get the money when you can get it, but that’s a that’s a mistake. And a lot of people are understanding now that it is a mistake. So doing a proper analysis. Again, it’s kind of a microcosm of your of your financial plan is, you know, inventory. So get organized in terms of what does the statement look like? What are the goals in retirement, and then how to properly deploy this, this inflation protected income stream, I think is going to be a big part. Now, for pharmacists, you know, your it might be 25%, 20% of your retirement paycheck, whereas, you know, the typical American it’s, it’s north of 50%. So but I think making sure that we’re positioning ourselves from, you know, to ensure that the income is correct. And then the basically the way that we collect the benefit is going to be in line with your overall retirement picture and financial plan.

Tim Ulbrich 29:13

And I think once we have that number, and again, we can adjust up or down, as you mentioned before as we’re running assumptions, but we can then build that into the nest egg calculation as well and see how that impacts where we’re at on a on a need for a monthly savings. Number four, Tim, on our list of six mid-career pharmacist moves to be considering would be the estate plan. We’ve talked about the estate plan in detail on the on the podcast episode 310. dusting off the estate plan. We’ll link to that in the show notes. But this time well, you and I were just talking about this last week. You know with your new baby in the house right there’s an opportunity to update documents we haven’t yet done our updates with with our youngest who soon to be five, so we’ve got to make sure his name is present, although he’s covered in language, but his actual name isn’t present in the documents. So I think again, and talk to us through why there’s an opportunity mid-career to really be updating these documents or perhaps for some even even establishing these for the first time.

Tim Baker 30:10

It’s probably, you know, I can say this being a ginger, but it’s probably the redheaded stepchild of like the financial plan. It’s, it’s ignored. And unless you’re military, a lot of the clients that are coming through the door really don’t have an estate plan in place. And one of the things that we implemented to kind of really combat this and really supercharge our ability to support clients is we have a an estate planning solution now that we, when we work with clients, if you don’t have a will, a living will, and well trust, if that’s needed, we can actually get those documents in place for whatever state that you live in country, which I think is awesome. So you know, it’s one thing to kind of, you know, say, Hey, Tim, this is what you need something to actually like, walk side by side with you and get the documents in place to make sure you’re covered. So I look at this really from a from from to, you know, to? Well, I would say it’s one big perspective, just change, right. So like, you know, if you think about, you know, maybe when you were, you know, early career to where you’re at now, for some people like could be different relationships, like there’s horror stories about people that are leaving money to like an ex. So I think it’s really important to kind of do a beneficiary check to make sure that the money is going to the right people, you know, Shay is going to be my primary beneficiary for like, a lot of the things that I have. But then right now, it’s like, Liam, my, my, my, or Olivia, my daughter, and Liam my son who are the contingent beneficiary, so if something were to happen to both, it likely would go to the kids, so like Zoe, or our newest baby has to kind of be in on that. Or it could be to like a trust, you know, a trust that is for the benefit of the kids, which is probably the better way to go with minor children. So to me, it’s more of again, looking at the the relationships, whether they’re, you know, out with the old in with the new, or, you know, brand new in terms of kids to make sure that the documents that you had in place clearly reflect your wishes today could even be things about, you know, bequesting, or, yeah, hey, I want to leave, you know, money to my alma mater, or to my cousin Fred, or things like that, that that’s a really reflects the things that you want to do. But also, you know, to, to ensure that from a protection perspective, you know, if you have dependents, they’re there, they’re taken care of, in a sense that, you know, if you were gone, or you can speak for yourself, the documents are that are in place, do that justice. So, for a lot of people mid career, it is adjusting what they have, or it could be it says that, that thing that’s been neglected that you’re like, I’m gonna get to it, I’m gonna get to, I’m gonna get to it, and you have it. You know, what, when I’m talking when I’m talking to prospective clients, and I bring up the fact that we can do this, that like, perks them up, because I know, it’s important. They know, it’s like, uh, I gotta find an attorney, or I gotta find some sort of solution. We got that covered. And to me that alone, I think, especially if you’re, you’re, if you’re a family, or if you you know, I typically say that the estate plan is really important, really, for anybody, particularly, particularly for people that have a spouse, a house, or mouths to feed, right. So if you have those things, and you don’t have documents in place, I think that that’s probably the biggest thing that we need to look at. You know, it’s important to get, you know, a plan for debt, it’s important to get your your nest egg and a plan for your assets and retirement planning. But this is really going to be important to shore up and make sure you’re good to go in the event that something were to happen to you. And again, it’s one of those things like, oh, that won’t happen to me, it will happen to somebody else. And then eventually, you’re going to be that that’s someone else. So not to be morbid, but you know, I think it’s important to cross those t’s and dot the i’s with regard to the state plan.

Tim Ulbrich 33:39

I mean, the reality is just like we’ll talk about in the final item number six on the insurance side, like it’s not fun to think about, right? So it’s easy, but been there myself, it’s easy to kind of drag your feet and let this be the call to action to either update, take a fresh look at those or get those documents created. Number five on our list of six mid-career pharmacists moves to make tip is probably one that a lot of people maybe aren’t thinking about, again, not necessary, the most comfortable thing to be doing would be some of the financial conversations with aging parents, you know, I think it’s common that we see mid-career pharmacists that are entering into a new stage of caring for elderly parents sometimes that, you know, could be a time investment that they need to factor in, that could be a financial investment. And for some, you know, that might be Hey, this is an expense that we need to be thinking about caring for our elderly parents or others. It might be, Hey, do they have the documents, the right documents in place that we just talked about? And do we have an awareness, understanding and transparency into that information? Which admittedly, is a very hard and awkward conversation to have no matter which way we’re looking at it. So thoughts here on some of the financial conversations with aging parents?

Tim Baker 34:44

So I think this can be both from an estate planning perspective, but also like a retirement perspective. So it’s very common for you know, our clients, you know, maybe who are you know, first generation immigrant that you know, they basically Say, Tim I am the retirement plan for my my parents. Right. So I think like building that into their into the our clients plan is gonna be really important because that’s, that’s part of their culture. That’s part of the goal. That’s I think that’s important. I think beyond that, you know, is more of the estate planning stuff. So I look at this as we have to, we have to secure our own estate plan. So our clients estate plan, but then what are the what are some of the things that can negatively affect, you know, and I’m talking negatively in terms of like financial, and maybe some of the legal and logistics, it could be the your parent, like elderly parents that don’t necessarily have a sound estate plan. So whether that’s, you know, we’ve talked about this, what’s the book “Mom and Dad, We Need to Talk” about some of those some of those conversations or some of those instances where, because of a lack of estate planning and foresight foresight, it’s negatively affecting the child’s plan or finances or time because they’re, they’re suing for conservativeship or you know, there, there’s just things that you’re don’t expect. So this is a tricky thing, because again, like I grew up in a household where we really talk about money that much, so it’s kind of a touchy subject. So how do you how do you go about having those conversations, and have, you know, have access to the detail that you need, but not being respectful, and not necessarily prying where you know, that it were, your parents made me feel uncomfortable, but they’re adult conversations that need to be had, because if you wait too long, then again, you’re you’re putting yourself in a position where you either can’t care or provide, you know, the support that you need to a parent, and it can ultimately, you know, negatively affect your own plan in terms of your, you know, financial resources, but also time. So, I think this is one of these things where, again, whether this is a family conversation around the holidays, or it’s a, an email or a letter, or it’s, Hey, this is a shared document, even give me passwords, and you know, I’m not going to access it until the time is needed to be able to do the things. But, you know, if something were to happen to your parents today, like, Do you know how to log into their different accounts? And what is the what’s the plan, and that can be a very uncomfortable conversation for some people, and for some people it’s not, like this, what it is, so I think, just to have that conversation, and understand where to go, what are the proper documents? What are the accounts? I think if you can do that before, you know, there’s capacity issues, or whatever, I think that’s gonna be really important. So that’s, that’s the big thing here.

Tim Ulbrich 37:47

And that’s one of things I appreciate so much, Tim, about Cameron Huddleston book, you mentioned, “Mom and Dad, We Need to Talk” is, it does provide a nice kind of third party and she’s got some great suggestions in that book of specific questions to ask, how to ask them how to ignite the conversations. And, you know, I think having that third party resource, even if you’re referencing that of, hey, I read this book, and you know, got me thinking that we should have a conversation and, you know, likely it’s not gonna be everything addressed in one conversation, but it opens up the door. Sure, it’s gonna be uncomfortable, but for, as you mentioned, for some people, maybe not depending on how they grew up around money, but so important that we understand, you know, what, what is the potential financial impact, as you mentioned earlier, for some if that means caring financially for the parents. And even if that’s not the case, there’s just a lot to consider in the estate planning process that we want to make sure that we’re honoring the wishes and aware of what’s going on as well. So number six, our final item on the six moves to consider for financial moves for mid-career pharmacists, Tim, is an insurance checkup. Again, not the most exciting part of the plan to be thinking about here, I’m talking about term life insurance, long term disability, perhaps beginning to think about long term care insurance as well. I know we’ve talked about term life, long term disability, even long term care extensively on the show before. Is this an opportunity to reevaluate those policies, you know, I’m thinking of this situation just as one, where let’s say somebody in their early 30s, bought a 20 year term. Now they’re at the end of their late 40s. And they’re looking at that saying, hey, the terms coming up here in the next, you know, five, six years. So talk to us about how we might look at the insurance part of the plan here as a mid-career pharmacist.

Tim Baker 39:25

I think like, in the absence of like, a, like an actual insurance calculation, you know, a lot of people will use a rule of thumb for term insurance of like, 10 to 15 times income, which again, that could have changed over the years. If, you know, if you have a 20 year policy, and you bought it in early 20s or 30s and now you’re you know, 40s 50s, like, what does that look like, you know, going forward? So I think like, I think, you know, and I think the other thing, too, is are there other wrinkles in your financial plan, i.e., hey, if I were to pass away, one of the questions I would ask myself is like, do I want to be able to send like, do I want to do I want Shay to have to worry about the mortgage or paying for the kids education? Right. So maybe that’s something that, like, I built into my, my plan going forward, and I didn’t have that, you know, 10 years ago. But now I do. So like, the other thing, too, is like, you know, again, mid-career, if you’re, if you maybe bought a house and moved out of the house, and now rented it, like, what, what happens from an insurance perspective? Like, do you want that property to be paid off? So I think like, I think, yeah, there’s there’s this renewal period, potentially, like, what do you need? And again, maybe it’s not, you know, maybe maybe you buy a 10 year term policy to kind of bridge it maybe don’t need another 20? Year? Maybe you do. But I think there’s also things that you can, in a proper calculation, say, Okay, this is important to me, this is not important to me, and then reflect that in insurance. So, obviously, I think the the life insurance is going to be really important. For some people, even getting it in place, which people just like the estate plan will drag their feet on that long term disability again, that’s one of the things I’m not really worried about short term disability, I think without it, I would just plus up the emergency fund, but from a long term disability, you know, again, how is your income changed over the over the course of the years, you know, if you’re, if you get it through a group policy, that’s going to typically be a function of what you earn. But, you know, if you have your own policy, should you supplement that policy? Because your earnings have continued to climb? You know, does that make sense long term care, we typically, you know, the our thought here is that we want to, we want to support the client as much to age in place. So so much of the science or so much of the studies show that the longer that you can be in your own surroundings and age in your own home, whatever that looks like. So that typically means bringing in some help as you age, you know, that’s going to be important. So what can we do to buy a long term care policy to meet that minimum, and then again, different parts of the country, that’s going to be a different, different amount per month. But we typically want to look at this, believe it or not, in our late 40s, early 50s, because there’s a sweet spot of, you know, if you’re too early, it doesn’t make sense. If you’re too late, it doesn’t make sense in terms of the availability of the of the policies. So what does that look like? So, typically, late 40s, early 50s, is when we want to have that conversation. And again, a lot of people, they kind of just like security, they kind of blow this off, like this is not for me, but you know, I think more and more of of, you know, the the industry is trying to support clients as best they can, to, you know, age in their home residence, and you know, and do it versus going into a facility or something like that. So long term care is going to be really important. And then the last one, I would mention, Tim is property and casualty. So doing an assessment here, holistic plan, which is our tax tool, has this deliverable that we’re testing out now that looks at homeowner’s auto and an umbrella policy. And what it does is try to find gaps in coverage. And if you think about homeowners, if you haven’t dusted that off in a while, like what your home was, you know, if you bought a home at 35, and now you’re 40, over the last five years, your home has appreciated a lot. So are you underinsured in that regard? You know, do you have enough assets? Or is there is there a risk there that you should have an overarching umbrella insurance to cover risk if something were to happen, or if you were to get sued? So these are kind of, again, next level things to kind of consider and just doing a checkup from an insurance perspective, do you have the proper life, long term disability? Is Long Term Care something on the horizon? And then from a property and casualty perspective, are there risks there that we don’t know about that we should have kind of, you know, a circling back to make sure that the coverages that we that are currently in place are, you know, suitable for what you’re currently at in terms of, of risk?

Tim Ulbrich 43:53

Yeah, that’s a good call on on the property casualty just for the appreciation you know, is a good good reminder for me as you mentioned, I was thinking about we had a fire of a house in our neighborhood it’s probably been sitting now for over a year and a half note no movement on the home and all I can think of is it’s probably some type of insurance issue going on trying to work through the process but you know that that’s exactly the question that came to mind right of hey, you know, what, what is the replacement coverage that you have? What’s the timeline of that replacement and given the appreciation and the cost to rebuild a fresh look at those policies, you know, is certainly warranted.

Tim Baker 44:27

I mean, I just I just got a picture here from Shay- fire in the next neighborhood. Fire started in the garage with a lithium battery charger catching on fire. So this is like as as we’re recording here, this is the picture from Shay so like, this stuff is important. Again, if we haven’t dusted that off in a while you’re leaving yourself open, you know, to risk that we don’t and I think it’s a somewhat of an easy fix to mitigate that.

Tim Ulbrich 44:53

Well I hope all was good there. Thanks again for great, great stuff, Tim, as we look through these six mid-career for pharmacist moves. For more information and details on each of these as a reminder, go to yourfinancialpharmacist.com/midcareer. Again, midcareer is one word. And for those that are looking to work with one of our certified financial planners at YFP on your individual financial plan, which would certainly touch these six areas as well as many more, make sure to head on over to YFPplanning.com. Again, that’s yfpplanning.com. You can book a discovery call. We’d love to have the opportunity to talk with you to see whether or not our services are the right fit. Tim, thanks so much and we’ll catch up again here in the future.

Tim Baker 45:32

Thanks, Tim.

Tim Ulbrich 45:34

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 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 357: Emergency Fund Check-Up: Five Questions You Must Answer

Posted on by Tim U

Tim Ulbrich, PharmD (YFP Co-Founder & CEO) covers five questions that you should ask related to your emergency fund to determine whether or not it is adequately funded and optimized.

This episode is brought to you by First Horizon.

Episode Summary

This week we’re diving deep into a financial fundamental that often flies under the radar: the emergency fund, also known as the rainy day fund.

Saving for unexpected expenses isn’t easy. It requires discipline, patience, and a leap of faith to stash away money for something you can’t predict. Especially when other financial goals, like paying off debt or investing, are competing for your attention.

In this week’s episode, we explore why having an emergency fund is crucial. From unexpected medical bills to home repairs or sudden job loss, life throws curveballs when we least expect it. But having a well-stocked emergency fund isn’t just about having the dollars to cover these surprises; it’s about gaining peace of mind and confidence.

Join host, Tim Ulbrich, PharmD, as he covers 5 questions you should ask related to emergency fund to determine whether or not it is adequately funded and optimized. Remember, when life throws you a curveball, your emergency fund will be there to catch you.

About Today’s Guest

Key Points from the Episode

Episode Highlights

Links Mentioned in Today’s Episode

Episode Transcript

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YFP 356: Love and Money: How to Successfully Navigate your Finances with a Partner

Posted on by YFP Media

Tim Ulbrich, PharmD (YFP Co-Founder & CEO) digs into how to successfully navigate finances with your partner and shares 25 questions you can use to frame conversations around money.

This episode is brought to you by First Horizon.

Episode Summary

On this episode, we’re talking about love and money! Discussing finances with your spouse, partner or significant other can be tricky sometimes. Tim Ulbrich shares 25 financial discussion questions to help you navigate these important conversations along with a free resource you can download to help get you started. From reflecting on your “money classroom” and the way you were raised to understand money to how you feel about debt, savings, and other important goals, Tim guides you through these important conversations. There is no one-size-fits all to managing finances in a relationship – but sharing the same vision and goals with your partner can set you up for success. This episode is brought to you by First Horizon.

About Today’s Guest

Key Points from the Episode

Navigating finances with a partner, identifying money personalities, and setting goals. [0:00]
Financial planning for pharmacists, merging money personalities in relationships. [1:49]
Money personalities and setting financial goals. [5:50]
Financial goals, budgeting, and spending plan for couples. [10:39]
Financial goals, debt management, housing, transportation, and children’s education. [14:57]
Financial planning with a partner, including goals, investing, and retirement planning. [20:04]
Financial planning and management strategies for couples. [24:32]

Episode Highlights

“I think it’s really important that we spend time to reflect on and identify our money personality and how this does or does not match with our partner. For some of you that have been at this topic for a while, you know how emotional and how behavioral this whole topic of managing money can be. And so it’s important we spend time to reflect on and to get curious about what our money approach is.” – Tim Ulbrich [4:13]

“It’s really helpful that we reflect upon what is the approach that we have surrounding money? How might that have been influenced by the money classroom that we grew up in? The more we can understand that about ourselves, as well as our partner, and how we bring those characteristics into the relationship can be really helpful as we set a plan going forward.” – Tim Ulbrich [8:03]

“Is everything merged when it comes to the finances? Might we have some things separate? Some things merged? Of course, that’s an individual decision for everyone. But ultimately, on some level, we want to have a shared vision, even if some of those items might be separate.” – Tim Ulbrich [8:38]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

Hey everybody Tim Ulbrich 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 we’re talking love and money how to successfully navigate your finances with a significant other spouse or partner. Easier said than done right? During the show, I discuss how to identify with your money personality and how this does or does not match with your partner strategies for setting and achieving goals together 25 financial questions and discussions that every couple should have? Hang with me. I’ll give you a resource and a link to download those questions and advice from the YFP community on what has and has not worked for them in their own journey, navigating this important topic with their partner.

Tim Ulbrich 00:45

Now before we jump into this week’s episode, I have a hard truth for you to hear. Making a six figure income is not a financial plan. Yes, you’ve worked hard to get where you are today. Yes, you’re earning a good income. But have you ever wondered, Am I on track to retire? How do I prioritize and fund all these competing financial goals that I have? How do I plan financially for big upcoming life events and changes such as moving, having a baby, changing jobs, getting married or retiring? And perhaps why am I not as far along financially at this point in my career as I thought I would be? Well, maybe the answer is that your six figure income is not a financial plan. As a pharmacist, you have an incredible tool in your toolbox: that’s your salary. But without a vision and a plan that it good income will only go so far. That’s why we started Your Financial Pharmacist where YFP we support pharmacists at every stage of their careers to take control their finances, reach their financial goals, and build wealth through comprehensive fee only financial planning and tax planning. Our team of certified financial planners works with pharmacists all across the United States and helps our clients set their future selves up for success while living a rich life today. If you’re ready to see how YFP can support you on your financial journey, you can learn more by visiting your financial pharmacist.com/learn again, that’s your financial pharmacist.com/learn. Alright, let’s hear from today’s sponsor First Horizon and then we’ll jump into the show.

Tim Ulbrich 02:16

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. For several years now we’ve been partnering First Horizon who offers a professional home loan option AKA a doctor or pharmacist loan that requires a 3% downpayment for a single family home or townhome for first time homebuyers, has no PMI and offers a 30-year fixed rate mortgage on home loans up to $766,550 in most areas. The pharmacists 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.

Tim Ulbrich 03:20

Hi there, Tim Ulbrich here flying solo this week as we talk about love and money: how to successfully navigate your finances with a partner. Now first things first, this is a heavy topic right? And I do not have all the answers. When it comes to our financial plan for Jess and I we have found the system- keyword system -that works best for us. But we are far from perfect. We’ve made our fair share of mistakes. We haven’t always been on the same page. And it certainly has required compromise and grace on both sides. So this is not a preach and teach episode. That would be very helpful. Rather, the intent is to give you some things to think about and conversation starters, to find the system that works best for you. Because at the end of the day, that’s going to be what matters most.

Now, before we jump into some of the tactical strategies, and some of the questions and conversation starters, I think it’s really important that we spend time to reflect on and identify our money personality and how this does or perhaps does not match with our partner. Right for some of you that have been at this topic for a while, you know how emotional and how behavioral this whole topic of managing money can be. And so it’s important we spend time to reflect on and to get curious about what is our money approach? What is our money, personality? What is our money classroom that we grew up in the household that we grow up in financially? And how does that perhaps shape how we manage our money today and ultimately how we merge two of those money personalities together as we try to work and get on the same page. So some questions to think about here as it relates to the money personality. Do you approach money in the same manner that you were raised? Have you reflected upon the money classroom that you grew up in? And maybe what worked and didn’t work? Was money in your household an open conversation? Was it a closed conversation? Was it stressful? Was it calm? What was the emotional tone surrounding money? Was there transparency around money? Or was it a taboo topic? What were the spending habits, what was said? And what were some of the unsaid lessons that you learned along the way? And how did all of this potentially contribute to the money personality and the habits that you employ today that you ultimately bring into your relationship? Right, good and bad. Probably true for all of us.

If you want some guidance on this, there’s a great resource, we’ll link to it in the show notes. The Money Couple has five different money personalities, they have a book and an assessment if you want to really dig in and go further on this topic. And they in that resource they referenced five money personalities, those five personalities are number one, the Security Seeker. Number two, is the Saver; number three is the Spender; number four is the Risk Taker; and number five is the Flyer. Now, anytime we do these assessments, right, we’re running a risk a little bit in terms of bucketing ourselves into one of these approaches, when often we may have a little bit of more than one of these. And that’s one of the things I like about this tool is they combine two of these, what they call a primary and a secondary to come up with your money profile. So for example, let’s say that you identify as a saver/security seeker. Okay, so just some quick definitions here a saver, pretty much their outlook is that as they share in their own resources, A penny saved is a penny earned. You make things happen by getting the best deal, right, you can often be someone that’s very thrifty. Characteristics of a saver would be someone who’s trustworthy organized with money, they also would have some real challenges potentially, including maybe obsessing over money, having a hard time letting go. And they would rarely spend compulsively, they really liked the plan. And they really liked that good deal. Now a Security Seeker, which here was the secondary personality, they have an outlook that better safe than sorry, right protection and security is the definition here. So these individuals make things happen by planning for the future. And they’re often very well prepared. So some defining characteristics here would be they can investigate things thoroughly do a lot of research challenges, of course, could be, you know, some of the potential and again, letting, letting go. And maybe finding that balance that we often talk about in the show of living the rich life along the way. Certainly also trustworthy with their finances, they want to make decisions by confirming that there’s a plan, right? So they’re not, they’re not gonna be very spontaneous, and they’re spending money like to have multiple options. This is just one example, one assessment. But it’s really helpful, again, that we get curious that we reflect upon what is the approach that we have surrounding money, how might that have been influenced by the money classroom that we grew up in, and the more we can understand that about ourselves, as well as our partner, and how we bring those characteristics into the relationship can be really helpful, as we then set a plan going forward.

Tim Ulbrich 08:27

So once we really think about some of those money, personalities, you know, I think it’s then that we want to really figure out how can we set and achieve goals together? Now we’re gonna get into a little bit about, you know, perhaps is it everything is merged when it comes to the finances? Might we have something separate? Some things merged, completely separate. Of course, that’s an individual decision for everyone. But ultimately, on some level, we want to have a shared vision, even if some of those items might be separate. And I think it’s so important, I’ve talked about this on the show before, that we start with the vision, and not necessarily start with the budget or the spending plan, right? Not start in the weeds, but really start on what is the dream that we have financially? What does success look like for us collectively as a unit? And can we agree upon that vision, that direction, that dream that we have for us financially, right? That’s a much, I say, easy but easier conversation than getting into the individual decisions. This is also the place where we really want to get all of those goals, all of those ideas out of our heads onto paper, we want to see what overlaps what doesn’t overlap. Obviously, there’s gonna be some compromise here along the way, but once we get them to be shifting from unsaid to said, right, so Jess can share her goals, I can share my goals, we can see what what is similar, what’s different, and then we can begin to start to compromise and prioritize those. That’s really where we can start to then begin to implement and execute on that vision. So for us, I’ve shared this before on the show, typically what we do is want once a year we’re looking at, hey, what does success look like for us over the next 12 months? Right? Keeping the bigger vision in mind? What does success look like for the next 12 months? And what are those things that we want to focus on spending? You know, so we’re looking at, hey, are we on track with savings goals for the future? And retirement planning? If not, what are some things that we want to surplus in the following year? What do some of the experiences look like for us in terms of vacations, home projects, things like that? What are the giving goals for the year right? These are the things that we need to begin to, again, get out of our heads onto paper so we can start to set a plan. Now, I think it’s really helpful here, especially if you have two individuals that are on completely different pages that this is really really where a third party can be very helpful. I know for Jess and I, our financial planner at YFP has been really helpful in getting us to have conversations not only together when we’re in the room with a financial planner, but also in between those meetings to make sure that this is an open conversation as we can possibly have. Now, I have some questions here that I think are good conversation starters. Right? I started the episode by saying this is not about telling you what you should do. This is really about helping to start conversations, stimulate some discussion so that you can figure out what the system is that works best for you. So I’ve organized these questions into different areas. And I have 25 of them, I’m just going to mention them briefly. And we have a one page resource that you can download for free that will have a list of these questions. You can go to yourfinancialpharmacist.com/25 – two five again, yourfinancialpharmacist.com/25.

Tim Ulbrich 11:43

Okay, so in the spirit of starting conversations, here are 25 financial discussions that I think are worth having. And let’s start with the first bucket, which is setting goals, budgeting and just the overall approach to managing the finances. So the first question is, have we discussed and agreed upon our short term, midterm and long term financial goals? Now you can define these differently, I think of short term goals is within the next 12 months, next year, mid-term, one to three years in long-term greater than three years. Obviously, you can determine the timeline that makes the most sense of you. And then furthermore, how can we best set, review and update these on a regular basis? So there’s that initial exercise, and then how often are we going to be reviewing these so that we can make sure we are able to implement those in the plan? Sounds simple, right. But everything starts with the vision and getting to some level of an agreement on the shared goals.

Second question here is have we developed and agreed upon monthly spending plan, budget, whatever you want to call it, that accounts for all of the income and all the expenses? And does this spending plan, budget, again, whatever you want to call it, does it represent and include the goals that we just worked through in the first question? Now, again, for some individuals, and I’ll share some data here in a little bit from our community, for some individuals, everything is merged. Some they have some separate, some is completely separate. So obviously, you have to work through this as it relates to how you treat the merging or lack thereof of the accounts. But do we have representation within our spending plan, approach, whatever that looks like lots of different ways to do that. So that the goals, there’s an actual plan to implement and achieve those goals.

Question number three, does one of us take more of the lead than the other when it comes to managing the finances? And if so, are both of us aware of our overall situation? How do we ultimately make sure that both parties are aware of the progress if one person is taking the lead. I have seen that that often, not always, often is the case where one person may take the lead. So if that’s the case, what’s the plan? What’s the strategy? What’s the structure so that both parties are aware of what’s going on? And the overall progress? Right, the overall situation?

Number four, I’ve alluded to this a couple times is the desire to merge all of our finances; to keep some separate, some merged; or to have everything completely separate. Now for Jess and I, we’ve made the decision that everything’s merged, I’m not here to tell you that you should do that, or that’s the only way. But really having that conversation of what’s best for us, is it all merge is a little bit of both, or is it everything that would be completely separate. Number five, do we need to check with one another before spending any money? If so, is it a certain amount? What’s the criteria for this? How do we determine this. Some, you know, couples might have a large purchase or something that would trigger hey, we need to have a discussion about this. So what are those criteria, if any exist when it comes to making some of those bigger purchases? So that’s the first group of questions around setting goals. budgeting and your overall approach.

Tim Ulbrich 15:01

The second group of questions is around debt management. Debt Management. So question number six here on our list of 25. is how much debt have we acquired thus far? Right? Do we know? Do we know the numbers? Is everyone aware of the debt that’s that’s accrued? And what will be our plan to pay off the debt? Do we both understand each other’s debt position and the feelings perhaps just as important, the feelings towards the debt? Right, for some people, I’ve talked about this on the show before for some people, there can be a significant aversion to debt? Others maybe that’s not the case. So if you have two individuals where you have opposite feelings on debt, that’s an important conversation to have. Are we treating this as our debt? Or is this separate debt? Right? When you think about things like credit card debt, student loans, car payments, or other things that especially may have been existing coming into the relationship. Number seven, again, on debt management, how comfortable are we with having debt? And I would encourage you to break this down further to different types of debt, right, including student loans, credit card, mortgages, car loans, etc. So not just a blanket debt good or bad, but how do we feel about different types of debt? And then final question on debt? Number eight on our list is do we view each other’s debt as our debt? Or is this your debt? Right? And how does that potentially approach how we pay that off? All right, third group of questions is around housing and transportation. So question nine on our list is how do we feel about renting property versus owning a home hot topic right now, given where the housing market is at, given where home prices are and where interest rates are at? And if we already own a home, are we okay with the current situation? Or is there potentially a desire to move? Right? Again, we want to get a lot of these questions and maybe things that we’re thinking about making sure we have an opportunity to discuss with one another. So if we don’t own a home already, how do we feel about renting versus owning a home? What’s that timeline? Like if we already own a home? Are we thinking we’re set? Or is there a potential or desire to move? Next question around housing transportation, number 10 on our list, if currently renting, and there’s a goal to own a home, do we agree on the location, on the purchase price, and the amount of downpayment that would be needed, right? That’s gonna have a big impact on the budget. And again, if things are separate, and not merge, how are we both contributing to that downpayment? And getting ready for that purchase? Number 11, as relates to transportation? Do we view our cars as a necessity? Is it a luxury where we lease? Are we gonna buy our cars? If we buy our cars? Are we paying them outright? Are we going to finance part of it? How do we view the transportation part of the plan? And again, let me pause here and reinforce what I was saying towards the beginning. I don’t really think there’s a right or wrong answer here. The goal is to really get you thinking about, hey, how do we feel individually? How do we feel collectively as a unit? You know, as I think about this question here on transportation, it reminds me of Ramit Sethi’s book, I Will Teach You To Be Rich. I’ve referenced that many times on the show before and one of the things he talks about he starts the book is this concept called Money Dials. And what he’s referring to there is identifying those things that derive the most significance and meaning for you as a part of the financial plan and have a plan to spend money, what he’s referring to is the dial, dial that up. And alternately for the things that you maybe don’t care as much about financially, dial that down, right. For some people, you know, transportation cars may be something that’s has significant value, and for other people, not so much.

Tim Ulbrich 18:35

Alright, next group of questions relates to kids, children. So number 12 on our list is how do we feel about one of the biggest expenses we often see in the financial plan – daycare? What’s our budget for this? And how does it fit in with other financial goals? Number 13, how do we feel about public versus private K through 12? education? You know, again, this might certainly link back to the home purchase and the location and and where you’re looking for home based on schools. And if it is private education is the goal, how will we plan for this and prioritize it with other financial goals? Number 14, again, in this area of children, how do we feel about paying for our kids college? This is a hot topic, right? You often see maybe people that are split on this. And how do we plan for this? Are we hoping to pay for it in its entirety? A partial amount? Are we banking on you know, scholarships or other funding other family to help taking on debt? What’s the plan for that? And then last question, as it relates to children, what ideas and strategies do we want to employ to teach our kids about managing money? Right? We started this episode talking about the money classroom we grew up in. And for those that have children in the home that you’re raising now, they’re obviously growing up in their own money classroom in your house. And so what strategies are we employing and how are we approaching teaching kids about money? What’s our philosophy about behind that, right. So this this gets to things like, you know, our philosophy around alarm allowances, and giving, and how we’re going to teach some of those lessons to our kids. And at what ages are they ready for those lessons?

All right, next group relates to saving, investing, and retirement planning. So question number 16, when it comes to the emergency fund, are we comfortable with three months? Right, your general rule of thumb recommendation three to six months of essential expenses? Are we comfortable with that? Three months, six months, something in between, something different? Have we discussed that? Again, are we on the same page with that?

Number 17, what financial goals are we trying to achieve by saving or investing? What does success look like, right? So we often talk about the importance of saving and investing for the future. But for what? What are we trying to achieve? And what does success look like? Number 18? What does retirement look like for both of us? Are there similarities? Are there differences? What’s the desired age? Right? What are the activities? What what are we working on? Which is the next question: what activities are we engaged in during retirement? What are we doing together? What are we doing separately? Right, beginning to envision so that we’re approaching that retirement phase with intentionality.

Next question, how much should we be saving and investing for retirement each month? And how do we balance and prioritizes with other goals? And then final question here on saving investing in retirement planning? What is our risk tolerance for investing? And again, if we have two different risk profiles? How are we approaching that as we’re saving, investing and planning for the future?

Final set of questions as a group, I’m just calling miscellaneous questions. Got four left on the list here. Number 22. How does each of us feel about giving? How much? How often?Where? How will we plan for this? And what priority? Are there certain things that we have to have achieved before we do this or not? Number 23: Do we plan to do the financial plan ourselves? Or are we looking to hire a professional to assist? Are we on the same page about this? If the goal is to hire someone, what are the criteria we’re going to use that will help us find the right fit? Who’s taking the lead in this conversation? What does that look like for us as a unit? When it comes to assisting family financially, whether that be caring for elderly parents, maybe that’s supporting a family member need or some other situation, how do we feel about this? Right? How do we feel about this financially, and the impact that it can have in other parts of our financial plan? And then finally, question number 25? How will we strike that balance between saving for the future and living a rich life today? What does it mean to us to be living that rich life today? And how are we prioritizing that in the financial plan?

So again, that’s 25 conversation starters, there’s a lot there, right, the different categories we talked about, you can download that list again, yourfinancialpharmacist.com/25. I hope you’ll reference that maybe print it off, and have some of those discussions with your partner. Next, I want to give some input not just from me, but from the YFP community on what has and has not worked for them in their own journey of navigate navigating this topic with their partner.

So I recently posted a poll on LinkedIn asking the following question, that for those that are working with a significant other spouse or partner on their finances, which of the following best describes your situation: is everything merged or all the finances merged? Are some things merged something separate? Or is nothing merged? In essence, everything is separate. And what we saw from that data was just shy of 50%- 49% responded that all of the finances were merged. 42% responded that some were merged and some are separate. And 10% responded that nothing was merged, and that everything was separate in their accounts. Now, some of the comments and advice that I thought were helpful to pass on and again, some some different perspectives here. Kelly had this to say lots of systems can work. But it all starts with transparency. It’s not uncommon for one person in the household to do the bill pay, and thus see more of the transactions. Periodic money dates can help facilitate conversation. A favorite topic in our house is identifying mutual goals and where we want to prioritize funding for the year, sometimes their goals are not aligned. And that is important conversation, as well. So Kelly, comes transparency. Having that open conversation having those periodic money does it dates and sometimes those goals aren’t aligned, and important conversation to get on the same page. Tracy said that we have a joint household account, where we contribute an equal amount each month to cover our household expenses, and some minor rainy day savings. We tossed around percentage based on income but landed on equal flat dollar amount. We also have separate personal spending accounts for ourselves, so we don’t feel like we have to justify personal spending to one another. We’ve divvied up who contributes and covers what to each savings bucket and who does the insurance via their paycheck all this to say after typing this that our marriage is basically a business. I thought that was some humor to add in there as well. Cassidy said my husband, I follow the 50-30-20 budgeting process right now. We have a joint account where 50% of our income goes towards household expenses and joint purchases, a joint high yield savings where we both contribute 20% of our paycheck for larger goals. And then 30% goes in our fun money personal checking accounts. So far it’s working great ensures that we’re both contributing an equitable portion of our income.

Final one that came in is someone shared just got married in summer of 2023. My husband wanted to keep our finances separate, except for one joint checking to pay utilities out of. This came from seeing his parents get divorced about six years ago and had always fought about money. He did not want that to be us. So going into the marriage, we plan to keep our own savings. I that’s a great example before I go further with this one of how that upbringing, right, how that money classroom can impact how we approach our money today. She goes on to say that we’re now nine months married, and we’re getting ready to buy a house with the need to pay the mortgage, we’re rethinking finances and will likely be combining more of our money. He prefers a separate checking account for each item, such as utilities and mortgage, we still plan to keep the money we had pre-marriage as our own stock savings, mutual funds, etc. We have a joint credit card for joint expenses and groceries that’s worked well. We still have separate credit cards. Being upfront about money has been so important to us. We’ve had several long conversations about money, pre-marriage, and within the last few months to get us set up for success. So it sounds like here, there’s even some transition, as they’re getting ready to purchase a home. They’ve been married now just shy of a year, maybe perhaps more that’s moving into the joint accounts, but a system that they’re still working through.

So I appreciate all of those that contributed providing different ideas. So again, the spirit of this right is to identify that system that works best for you. Right works best for you and your partner, really accounting where we started with reflecting on and getting curious about what is the money mindset? What’s the money personality approach that I have? And do I have a good understanding of that for me, as well as my partner? Really coming up then with those shared goals? That vision we talked about? What does success look like in the short, mid and long term, and then beginning to work through those individual areas of the financial plan.

Tim Ulbrich 27:19

Well, certainly last but not least, as many of you know, we have a team of Certified Financial Planners at Your Financial Pharmacist that we offer fee-only financial planning and tax planning, we work with pharmacists all across the country. And certainly we’d love to have the opportunity to work with you. And we’d love to have an opportunity to talk more to see whether or not the services are a good fit. You can learn more about our fee-only financial planning services again at yourfinancialpharmacist.com/learn. Again, that’s your financial pharmacist.com/learn. I think, as I mentioned a couple times that third party, right, that third party can be so helpful to facilitate some of these conversations and to begin to execute on the different aspects of the financial plan. Well, thanks so much for listening, and have a great rest of your week.

Tim Ulbrich 28:05

Before we wrap up today’s show, I want to again, thank this week’s sponsor of the Your Financial Pharmacist 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 and the YFP community have taken advantage of First Horizon’s pharmacist home loan, which requires a 3% downpayment for a single family home or townhome for first time homebuyers 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.

Tim Ulbrich 28:51

As we conclude this week’s podcast and important reminder that the content on this show is provided 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 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.

[END]

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YFP 351: Legacy Planning 101: How to Build Your Legacy Folder

Posted on by YFP Media

Tim Ulbrich discusses the importance of creating a legacy folder to organize essential financial documents for access during emergencies and peace of mind.

Episode Summary

In this episode, YFP Founder and CEO, Tim Ulbrich, delves into the critical aspect of establishing a “legacy folder” to efficiently organize essential financial documents and accounts. This folder serves as a vital resource in emergencies, streamlining access for loved ones and averting confusion or delays. Drawing from personal experience, Ulbrich shares how he and his wife maintain their financial plan and essential documents in a shared electronic folder and a secure physical safe at home, ensuring accessibility and peace of mind during unforeseen circumstances.

Tim explores the contents of the legacy folder, which encompass a comprehensive checklist, electronic copies, and hard copies of vital papers such as birth certificates and social security cards and other critical documents like insurance policies and estate planning materials.

Learn how to proactively organize your financial affairs to safeguard against unforeseen events, ultimately fostering financial peace of mind and security.

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.

Key Points from the Episode

Building a legacy folder for financial peace of mind. [0:00]
Creating a “legacy folder” for financial documents. [2:36]
Important documents, insurance policies, estate planning, and car titles. [6:50]
Organizing financial documents for emergency situations. [14:59]

Episode Highlights

“So when it comes to why having a legacy folder is important. Getting organized with your financial records plays a significant role not necessary in terms of moving the needle on your net worth but in making sure you and others have access to all the information that you need to make informed decisions.” – Tim Ulbrich [2:24]

“Now, what is the legacy folder? So essentially the idea of a legacy folder, whether it’s a physical copy and electronic copy, or combination of both. It’s a place where you have all of your financial related documents. So in the event of an emergency, others will be able to quickly assess your financial situation and get access to all of the documents and accounts that pertain to your finances.” – Tim Ulbrich [4:07]

“Don’t underestimate the peace of mind and the clarity that can come from having this information collected.” -Tim Ulbrich [5:25]

“Once you get organized with your information, you’re going to be walking from that point of confidence, you’re going to feel prepared in taking action on other parts of your financial plan.” – Tim Ulbrich [16:49]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRO]

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 talking through Legacy Planning 101: How to Build your Legacy Folder and why it’s important. To assist with implementing this important step and your own financial plan, make sure to download the YFP Legacy Folder Checklist at yourfinancialpharmacist.com/legacy. This checklist includes a list of 15+ financial related documents that you can have a record of in your legacy folder. It helps you identify key parts of your financial plan that you may or may not have in place but need to get started. And it helps give you peace of mind knowing that in the event of an emergency, all of your financial documents are organized in in one location. Again, you can access that free checklist at yourfinancialpharmacist.com/legacy.

Tim Ulbrich 00:51

Now before we jump into today’s episode, I have a hard truth for you to hear making a six figure income is not a financial plan. Yes, you’ve worked hard to get where you are today. Yes, you’re earning a good salary. But have you ever wondered, am I on track to retire? How do I prioritize and fund all these competing financial goals that I have? How do I plan financially for big upcoming life events? Whether that be moving, having a child, changing jobs, getting married or retiring? And why am I not as far along financially at this point in my career, as perhaps I thought I should be? The answer your six figure income is not a financial plan. As a pharmacist, you have an incredible tool in your toolbox your salary, but without a vision and a plan that good income will only go so far. That’s in part why we started Your Financial Pharmacists back in 2015. At YFP we support pharmacists at every stage of their career to take control of their finances reach their financial goals and build wealth through comprehensive fee only financial planning and tax planning. Our team of professionals including certified financial planners and a CPA, work with pharmacists all across the US and help our clients set their future selves up for success while living their rich life today. Ready to see how Your Financial Pharmacist can support you on your financial journey? The next step is to book a free discovery call with our team by visiting YFPplanning.com Again, that’s YFPplanning.com Alright, let’s jump in today’s episode.

Tim Ulbrich 02:18

Hi there, Tim Ulbrich here. Welcome to this week’s episode of the YFP Podcast. I’m flying solo this week to discuss legacy planning 101: how to build your legacy folder and why it’s important. Now this episode is going to be a brief one. But I hope you can walk away with a specific action item or to relate it to your own financial plan. Whether that be to create a legacy folder if you don’t already have one or if you do to make sure that you look at it and update that information if it’s been a while. So when it comes to why having a legacy folder is important. Getting organized with your financial records plays a significant role not necessary in terms of moving the needle on your net worth, but in making sure you and others have access to all the information that you need to make informed decisions. Think for a minute about all the various financial accounts, documents, records, insurance policies, tax returns that you have right, the list quickly grows to be one that is overwhelming. And the more you operate in your own system, the easier it is to navigate for you. But unfortunately harder for others to unravel, should they have to do so in the future. Right? Think of a situation where in the event of an emergency, you have this beautiful system you’ve created, you know where all your accounts are all your files, all your passwords, but unfortunately, others aren’t able to readily access that and to make sense of that information.

That’s where the legacy folder concept comes in. I actually first heard of this idea, it’s not my idea, I first heard of it when taking Dave Ramsey’s Financial Peace University class, this was probably 15 years ago through our local church. And I remember walking away thinking, wow, that is so obvious, yet so important. And something that Jess and I hadn’t yet done at that point in our financial plan. Now, what is the legacy folder? so essentially the idea of a legacy folder, whether it’s a physical copy and electronic copy, or combination of both, which is what we have, and I’ll share more information about that. It’s a place where you have all of your financial related documents. So in the event of an emergency, others will be able to quickly assess your financial situation and get access to all of the documents and accounts that pertain to your finances. We just went through updating this – Jess and I did in our own financial plan, shifting everything to an electronic version with the exception of a couple things that we keep in a safe at home, so that in the event of something happening to Jess or I or both of us, those caring for our boys along with our financial planning team at YFP readily have access to all the necessary information that they would need.

So when I think of the importance of this, you know, it really is peace of mind but there’s a secondary part that we often don’t think about, which is it forces you to get organized right? When you go through this process, and I’ll talk about the different sections of our own legacy folder. When you go through this process, you quickly might realize, wow, I’ve got some areas of the plan that I need to clean up, I need to gather some information. And this like many other parts of the financial plan, sure, it takes a little bit of time to get set up. But once you have it set up, right, we’re then in that update or maintenance mode. And again, don’t underestimate the peace of mind and the clarity that can come from having this information collected. So what’s included in the legacy folder? Well, I mentioned our checklist before and if you didn’t already download that make sure to download the YFP legacy folder checklist, you can access that again, at yourfinancialpharmacist.com/legacy that will give you a good guide.

There’s no one right answer to this. So I’m going to talk through what we have in our legacy folder. And you can see maybe some of that makes sense. Or maybe you have other documents and sections that you would want to include. So here’s how we have it organized in a combination of a Google Drive a shared drive, and a safe at home with the password the master password to our One Password, which is the the password account that we use the password management account that we use, I have the master key password in a safe at home, along with some hard copies of some documents like birth certificate, social security card, etc. Those things are in the safe, everything else is stored electronically and anything that’s in the safe as referenced as such in the electronic documents so so keep that in mind to combination of an electronic folder we used to have this all in a paper copy it was in a blue folder, we used to joke with our my parents and our in laws that hey, if anything ever happens to Jess or I – get the blue folder! For obvious reasons, having everything in a hardcopy wasn’t ideal in terms of updating that as well as making sure that the integrity of documents stay in place.

Okay, so section one is what we call important documents. Okay, so these are birth certificates for Jess, for me, for our four boys, these are our social security cards for us and the boys, this is our marriage certificate. These are our passports. And these components, we keep in a fireproof safe at home, obviously, because the hardcopy is important to have. So that’s section one important documents.

Section two is insurance policies, and information. So this is something that we have to update. Some of these we have to update annually, others not so much. So for example, long term disability policies or term life policies unless something changes with those policies, you know, we’re not updating those on a regular basis. But this includes things like auto insurance policies, homeowners insurance policies, or umbrella insurance policy, or health insurance policies, long term disability insurance policies, and our term life insurance policies. And we have a couple of different term life policies and long term disability policies. So all of that is included here in section number two. Now, what I have done typically in the electronic version, is I’ll list these out. And then I have the the actual policy hyperlink. So it can be easily reference to get to the actual policy, right, whether that’s a term life, disability, or another type of insurance policy. So that’s section two insurance policies and information.

Section three is estate planning documents. So we have an electronic copy on the Google Drive folder, the shared folder, and then we have a hard copy of these as well, because of the wet signature that’s needed on these and each state is different. Ours is a wet signature with a note notarized copy. So we have a hard copy in the safe at home. So these include our revocable trust agreements, this is our healthcare power of attorney, this is our living will, our last will and testament, et cetera, a lot of work to be done here. Now, if you’re hearing those terms, and thinking, Wow, maybe I need to get my estate planning documents in place. We’re gonna be talking more about that on the podcast, but I would reference you back to Episode 222. We’ll link to that in the show notes, when we brought on a couple of attorneys to talk about why estate planning is such an important part of the financial plan, as well as Episode 310, when Tim Baker and I talked about dusting off the estate plan, so this is not a you set it and you’re done.

Again, most of the work is upfront. Sure, there’s an investment of time and money to get these documents created. Again, the value is in the process of getting these created. And then you’ll have to update these periodically. So Jess and I often joke that our youngest son, Bennett, he wasn’t named individually in our documents when we created the so I guess that’s how it goes right when you’re the fourth son in the family. So he’s represented – it does address future children. But it’s just funny that he’s not called out individually. So we’ve got some updating to do there. So that’s section three – estate planning documents. And again, we keep a hardcopy in the safe. And then we have an electronic version of that available as well.

Section four is car titles. Now I’m not sure how valuable these are based on the current conditions of our minivan and our other vehicle, but, you know, calling these an asset would be a stretch but nonetheless, they have some value. Okay, so we have the car titles, readily available in section four so that someone could quickly sell or transfer the title of the car if need be. That’s section four car titles.

Section five is all documents related to our homeownership, okay, this is the deed on our home. This is the HELOC that we have open in the event, essentially, we have this as a backup emergency fund or if we need to tap into some of the equity in the home. So this is the HELOC documents. This is another copy of our homeowners insurance just to have it all in one place as well. So any important document related to the home, obviously, information about the mortgage, all of that is here in Section Five.

Section six is probably the biggest document I think, or close to the biggest section, which is a summary of all of our financial accounts. It’s our net worth tracking sheet, which I’ve talked about before on this show. And it’s all of our social security statements. Now I was just talking with a group of pharmacists last night that I was presenting to and I was talking about, hey, how many of you have pulled your Social Security statements to see your projected benefits, and I kind of got this impression that it was very few if any, right. So if you haven’t done that, it’s a good action step you’re going to do if you go to ssa.gov, to look at your Social Security statements, it’s got good information on there on projected benefits, and you can see your work credits. It’s pretty cool.

But this is a section where I have a table of contents that explains every account we have, right. So at Ally Bank, we have our high yield savings account, we have our checking account. Here’s where we have our Roth IRAs. Here’s where we have our 401 K’s. Here’s where we have a Roth 401 K. For every single financial account that we have, what is the account name? What is the institution? Where’s the link to that account? And what are we using that account for. And then as I mentioned before, we use One Password to store all of our password information and shared between Jess and I and the master key to that Password account is inside of our lock safe at home. So essentially, in the lock safe, you get to the One Password document through that you can then access all the individual financial accounts.

Now I know I’ve talked about this before, but I really believe in the value and the importance of not only having a good idea of the summary of all of your accounts. But this is a good place to also be tracking your overall net worth and your trajectory of your financial health. Right net worth is your assets what you own minus your liabilities, what you owe. Tom Stanley talks about the importance of tracking your net worth in the book, The Millionaire Next Door, and he talks about those that develop and build wealth over time they think differently, right? What he’s talking about there is that they realized that their income is a good tool. But their income is only a tool if they’re applying that to building their assets and paying down their liabilities, which ultimately is translating into their net worth.

So Jess, and I track our net worth on a monthly basis. It’s a very simple spreadsheet. If you want to see what that spreadsheet looks like I have that in the toolbox, yourfinancialpharmacist.com/toolbox along with a couple of the resources that I use, you can make a copy of that make it your own, very simple- every financial account we have, it’s the value of the asset. It’s the amount of liability assets minus liabilities we track that month over month, I think about that as the 20,000 foot view of kind of where we’re progressing financially, of course, the real work to be done is on a much more granular level. So that’s Section six, summary of financial accounts, net worth tracking sheet, and social security statements.

Section seven is our tax returns, this is our tax returns. On the personal side, this is a tax returns on the business side. So for us that would be the business, Your Financial Pharmacist as well as the business YFP Tax. And then for the property that we own, we have a separate LLC for the property as well. So for any business filings or extensions, or important communications, documentations. Obviously, it’s important to retain your tax records for everyone. But here to have those readily available, as well whether it’s needed in the event of an emergency, or if you’re working with a tax professional or someone you need to reference that information that’s good to have. So that’s section seven tax returns.

Section Eight is all information related to business records. So this is a summary of the business entities, I have a quick summary of what are the different entities and then of course, all of the legal documents, including the incorporation documents, the operating agreements, the buy/sell agreements, really important that you not only have these in place, but you have these readily available and accessible in the event of something happening. So any important document related to the business is there. And then as I mentioned, I kick off this section with a quick summary. So that in the event that someone needs to look at this, they can quickly understand what are the entities, what’s my ownership in the entities, and then what are the important documents within each entity that’s included in the legacy folder.

Section nine is just a miscellaneous section. So this could be utilities information or other information that is not easily fit into one of the other buckets in the first eight sections. Pretty simple. Right? So yeah, it takes time. And I think even recently, when I went through a pretty major update of this, I want to say it took me you know, three, four or five hours just to update documents, things that I had to scan to get electronically and making sure I had the right setup, creating some of the explanation in the summary documents. But not only as I mentioned, is it helpful for whoever is looking at this information? Hopefully that never needs to happen. But it’s also helpful for you as you go through this to identify like, oh, maybe there’s some gaps in here in the financial plan that we could use as an opportunity to make some adjustments or changes as you’re looking at goals for the next year.

So in terms of who has access to this, of course, Jess and I have access. Also, my in-laws have access to this who would in our state planning documents become the caregivers of our boys in the event of an emergency so important for them to have access and awareness of it, as well as our financial planning team at YFP right. So I know that in the tragic instance, if Jess and I were to get in an accident tomorrow, and something terrible would happen, I know that instantly my in-laws, who would be in charge of the boys and I know our financial planning team who would be helping them and making decisions, they have access to all of this information. Now, it doesn’t mean it’d be easy. There probably are still questions, maybe things that I’ve missed or haven’t thought about. But it’s a really, really good start again, gives us peace of mind knowing that we thought through this in great detail.

So in closing, right, simple yet effective, simple, yet effective. And that’s so true for so much of the financial plan. Sometimes we overthink this, we overcomplicate this, yeah, there’s work to be done. There’s professionals to be hired, certainly on the financial planning side, on the estate planning side, on the tax side, but the gathering of documents and information. This seems like a bigger mountain to climb than it actually is. And I think for obvious reasons, right? Who likes to think about, you know, some of these circumstances that might be tragic, where someone would need to access your information. It also might expose areas of the plan really like ah, I don’t really like the progress that we’ve made, we’ve got opportunities to improve. So for those reasons, it seems like a bigger mountain to climb. But I promise you that as you go through the process, it likely is easier than you think. And once you get organized with your information, you’re gonna be walking from that point of confidence, you’re gonna feel prepared in taking action on other parts of your financial plan. If you have questions on this episode, as always, feel free to reach out to us [email protected]. Again, make sure to download the YFP Legacy Folder checklist. As you follow along in this episode, you can get that at yourfinancialpharmacist.com /legacy. Thanks so much for joining this week. We’ll catch you next week. Have a good one.

Tim Ulbrich 17:17

As we conclude this week’s podcast, an important reminder that the content on this show is provided 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 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.

[END]

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Note: Referral fees from affiliate links in this table are sent to the non-profit YFP Gives. Read the full advertising disclosure here.	Bonus	Starting Rates	About	YFP Gives accepts advertising compensation from companies that appear on this site, which impacts the location and order in which brands (and/or their products) are presented, and also impacts the score that is assigned to it. Company lists on this page DO NOT imply endorsement. We do not feature all providers on the market.
	$750* Loans â‰¥150K = $750* â‰¥50K-150k = $300	Fixed: 4.89%+ APR (with autopay)	A marketplace that compares multiple lenders that are credit unions and local banks	Check Rate
	$500* Loans â‰¥50K = $500	Variable: 4.99%+ (with autopay)* Fixed: 4.96%+ (with autopay)** Read rates and terms at SplashFinancial.com	Splash is a marketplace with loans available from an exclusive network of credit unions and banks as well as U-Fi, Laurenl Road, and PenFed	Check Rate

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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 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 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.

[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 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.

[END]

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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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