YFP 372: Rising Stars: Meet the YFP Gives Scholarship Winners


Tim Ulbrich, YFP CEO, talks with the five recipients of the first YFP Gives scholarships.

Episode Summary

This episode is filled with inspiration as we share the stories of the five winners of the first YFP Gives scholarship.

Let this episode be a ray of sunshine amidst some of the cloudy skies plaguing the pharmacy profession. If the future is in the hands of these outstanding students and new practitioners, then the future is bright. In this episode, you’ll meet: 

  • Alyssa Falleni, clinical pharmacist who specializes in addiction treatment, HCV, and HIV and is currently working in HIV outpatient care at Hartford Healthcare
  • Momitul Talukdar, who after working in the radiology department at a hospital, discovered her calling as a nuclear pharmacist. Momi currently works at PETNET in Cleveland, OH
  • Perrigrine Garner, a pharmacy student at the University of Toledo with a passion for helping those in need and a dream of owning an independent pharmacy that caters to those with chronic medical conditions and disabilities
  • Ruth Adeyemi, a fourth-year PharmD/MPH Nigerian International student at the University of Florida College of Pharmacy and College of Public Health and Health Professions, with a deep-rooted commitment to improving health outcomes in underserved communities, particularly in her home country, Nigeria.
  • Ai Len Nguyen Phan, a Rutgers Industry Fellow at Roche Genentech in San Francisco, with a desire to work in medical affairs and give back to the pharmacy community through her mentorship to the Rutgers pharmacy students

About Today’s Guests

Alyssa Falleni is a clinical pharmacist who specializes in addiction treatment, HCV, and HIV. After graduating from the University of Rhode Island, Alyssa went on to complete an ambulatory care residency at Hennepin Healthcare in Minneapolis, MN. Following residency, Alyssa completed a two-year VA Advanced Fellowship in Health Professions’ Education, Evaluation, and Research (HPEER) at the VA in West Haven, Connecticut. She will be continuing her teaching with the Yale School of Medicine as she begins a new HIV specialty position with Hartford Healthcare.

Momi Talukdar, MS, PharmD Candidate 2024 is a graduate of Northeast Ohio Medical University College of Pharmacy. She’s an incoming nuclear pharmacist at PETNET in Cleveland, OH. Along with her passion for nuclear pharmacy, she loves teaching nuclear pharmacy as an adjunct faculty at University of Wisconsin LaCrosse. In her spare time, Momi enjoys watching new films and art shows and trying out local coffee shops.

Ai Len (Aileen) Nguyen Phan is a second-year Rutgers Pharmaceutical Industry Fellow at Genentech, Inc. – Rare Blood Disorders Medical Science Liaison. She graduated from the University of Maryland, School of Pharmacy with her Pharm.D. and M.S. in Regulatory Sciences in 2023. She supported the US Medical Information & Communication Target Therapies teams during the first year of her fellowship. While Aileen has just recently started her industry career, she continues to give back to the pharmacy community through her mentorship to the Rutgers pharmacy students, such as supporting their scientific research on using artificial intelligence to assess oncology treatments. 

Perrigrine Garner, a non-traditional student, and mother of three amazing daughters, is currently a P4 at the University of Toledo’s College of Pharmacy and Pharmaceutical Sciences. Perrigrine is passionate about advocating for people with disabilities, especially in healthcare, as she is also a person with physical disabilities. Upon graduation, her dream is to help advance inclusivity in her community by opening an independent pharmacy that caters to those with chronic medical conditions and disabilities.

Ruth Adeyemi, a fourth-year PharmD/MPH Nigerian International student at the University of Florida College of Pharmacy and College of Public Health and Health Professions. Her journey in pharmacy is fueled by a deep-rooted commitment to improving health outcomes in underserved communities, particularly in my home country, Nigeria.

With this passion, she started The Compassionate Pharmacy Practice Project (TCPPP), a project dedicated to transforming the Nigerian pharmacy practice system. The goal is to ensure that Good Pharmacy Practice (GPP) and Compassionate Care are not just concepts but realities in both urban and rural areas, significantly improving health outcomes in these communities.

While Ruth is Nigerian, her commitment to improving health equity in underserved communities extends beyond borders. She is dedicated to her goal of ensuring that all patients, regardless of their neighborhood and built environment, receive the patient-centered, optimal, and compassionate care they deserve.

Key Points from the Episode

  • Student loan debt and career transition with scholarship winner Alyssa Falleni. [0:00]
  • Financial planning, upbringing, and community support for a pharmacist’s future. [5:18]
  • Pharmacy career path and nuclear medicine technology program with Momitul Talukdar. [12:17]
  • Pharmacy school, career goals, and community service with Perrigrine Garner. [20:18]
  • Resilience and financial planning for pharmacy school student with disabilities. [28:24]
  • Pharmacy student’s passion for advancing health equity in underserved communities with Ruth Adeymi. [34:41]
  • Digital skills training for African women. [39:08]
  • Career goals and experiences in the pharmaceutical industry. [44:36]
  • Resilience and determination in overcoming challenges with Ai Len Nguyen Phan. [51:47]
  • Managing student loan debt and long-term financial stability. [55:50]
  • Financial goals and debt management for a pharmacy student. [59:31]

Episode Highlights

“I want to be able to be present. I don’t want to have money, and the fear of not having enough or running out or, you know, that is not what I want for my future. So I am trying to be very intentional in making these decisions to set me up, to keep me on that path that I want for my future.” – Alyssa Falleni

What I learned early on from my mentors is that when I was an API student, I had the mentality that I was an employee, and now that I’m an employee, I had the mentality of a student, and this way I always like to learn, and I always like to be in a growth mindset.” – Momi Talukdar

That’s what has helped me through this pharmacy school has helped me through pharmacy school, and just thinking of my kids and knowing I went into this to better the lives of my children and better the lives of other people with disabilities, that’s just what kept me focused. “ – Perrigrine Garner

“Wherever I find myself, always looking for opportunities to promote and advance underserved communities.” – Ruth Adeymi

“It was really focusing on what are my goals now? What are the long term goals? And working towards them has always gotten me to where I am today. Going from learning English to getting into being a first generation in college. For me, it’s always been setting goals and working really hard toward them.” -Ai Len Nguyen Phan

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey guys, welcome to this week’s episode of The YFP Podcast, where each week, we strive to inspire and encourage you on the path towards achieving financial freedom. This episode is filled with inspiration as we share the stories of the five winners of the first offering of the YFP Gives scholarship. Let this episode be a ray of sunshine amidst some of the cloudy skies that are plaguing our profession. If the future of our profession is in the hands of these outstanding students and new practitioners, I do believe the future is bright. Each of these five individuals featured on this episode recieved a $1,000 scholarship, along with one year access to our online community, yp, plus a copy of our book, seven figure pharmacist and a one on one Ask Me Anything session with myself or Tim Baker. Each of these applicants submitted a video recording that described their career goals and journey and how they would benefit from the scholarship, along with a letter of recommendation. Now, I expected these submissions to be good, but they were great. You’re going to hear yourself here in just a few moments as I share their incredible stories. And while I am grateful to have the opportunity to give out these scholarships through our nonprofit, YFP Gives, we want to do more, and we need your help. Please consider making YFP Gives a part of your giving plan and set up a one time or recurring donation by visiting YFPgives.org and clicking on Donate Now. As you’ll hear from these stories, your gift will have a positive impact and go a long way in helping students and new practitioners make that important financial transition early in their careers. Again, you can make a donation by going to YFPgives.org and clicking on Donate Now. All right, let’s hear from our first scholarship recipient, Alyssa Falleni. Alyssa, welcome to the show, and congratulations on being a YFP Gives scholarship winner.

Alyssa Falleni  02:01

Thank you so much. It is such an honor, and I’m so excited to be here with you today.

Tim Ulbrich  02:05

So give us a brief introduction of yourself, your background in pharmacy and the exciting work that you’re beginning now.

Alyssa Falleni  02:12

Yeah. So I am a University of Rhode Island PharmD graduate, and after spending six years there, I went on to residency in Minneapolis, Minnesota, at Hennepin Healthcare, where I focus primarily on ambulatory, outpatient clinical care, specifically in HIV and primary care. And after that, transitioned a little bit non traditional pathway to an academic fellowship with Yale and VA Connecticut in health professions, education, evaluation and research. It’s a bit of a mouthful, but just finished up my two years there, and thankfully have found a position working with Hartford Healthcare, where I will be doing outpatient HIV patient care. So I’m super excited to be transitioning into that new role.

Tim Ulbrich  03:10

So nearly a decade you’ve been training, right? You mentioned six years of school, three years of postgraduate training, a really unique academic fellowship program, and now you’ve got an exciting position that you’re heading into in the HIV outpatient clinical space. So all of that great on the career side, but we know with nearly 10 years of training can come a significant amount of student loan debt, right? That’s a big investment of time, big investment of money. And one of the things that you shared in your application submission for the YFP Gives scholarship is that you’re gonna be coming out with nearly $200,000 of private student loan debt. So as you reflect on the path going forward, couple $100,000 of student loan debt, that’s a big number. I’m sure there’s some weight that you’re feeling there also the exciting aspects that are ahead for your career. Just emotionally, how are you feeling about this transition financially?

Alyssa Falleni  04:06

There’s definitely a lot of excitement. I feel like all throughout pharmacy school, and even when I decided to become a pharmacist, everyone told me, you know, oh, what a great career. You’re going to be making so much money. And I have not felt that yet. I’ve been, you know, paying off my loans since I graduated on my trainee salary, which, again, very blessed to have at least that opportunity to be paid for that, but transitioning now to making more than double what I just was for the past three years, I’m excited. I’m also terrified. You and I talked a little bit about that a couple weeks ago, where I just don’t want to make the wrong decisions, and I want to make sure that I am putting every dollar in a spot that’s going to serve me well. So, yeah. A lot of excitement, but definitely some nerves about making the right choices.

Tim Ulbrich  05:05

Yeah, and you’re not alone in that kind of the split feeling right, the excitement, the enthusiasm, also the fear can be real, the overwhelming aspects of the student loan debt, and as you said, wanting to make the right decisions. And that’s one of the things I really admire about you, Alyssa, when we talked last week, I really sensed an intentionality and engagement of how you want to do this well. And I often say that mindset is such an overlooked yet important part of the financial plan. And many pharmacists are blessed with a great income, but if we don’t put that income to work, which largely depends on, you know, what is the mindset that we’re bringing? How intentional are we going to be? How proactive are we going to be in our planning? That income sometimes can only go so far, and so I’m excited to see where you go over the next several years, and I sense and feel that fear and some of those feelings have overwhelmed with you. But I also think you’ve got a bright future ahead of you. One of the other things you shared in your application, which is worth discussion, because I think we often underestimate how our upbringing can inform how we approach our financial situation today. And so you shared a little bit about some of the challenges, some of the struggles financially in your upbringing, and perhaps how you want to rewrite that story going forward.

Alyssa Falleni  06:24

Yeah, you know, I never felt like I didn’t have all the opportunities growing up, but now that I have, you know, looked back and seen what my parents did, so that I never felt that way. They definitely were stressed about money all the time. I’m one of four kids. We live in New Jersey, so, you know, property taxes are really high, and, you know, my parents gave us everything to be able to play, you know, club sports and do all the activities. But now, you know, hearing some of their discussions, because they’ve gotten a little bit more open, discussing with us about their finances, and I realized that they worked really hard to do that, and it was always on their mind, and that is not what I want for me or for my future family. I want to be able to be present. I don’t want to have money, and the fear of not having enough or running out or, you know, that is not what I want for my future. So I am, you know, trying to be very intentional, as you alluded to, you know, making these decisions to set me up, to keep me on that path that I want, you know, for my future, and I just got engaged, so my future husband and I, you know, we’re starting to really think about how we want to, you know, merge our lives together and make sure, you know, we make the right choices so our kids can feel that way. But also, you know, I feel a little guilty now as an adult. You know, never made to feel that way by my parents. But yeah, you know, I had known maybe I would have given something up or, you know, and I don’t want that to burden my future.

Tim Ulbrich  08:08

and I really admire, Alyssa, your awareness of that, because we often may not realize that, you know, some of the upbringing, some of the emotions, we call it, the Money Scripts, the Money Classroom we grew up in, we bring that into our own financial plan. And when we’re in relationship with someone else trying to do this together, we bring that together and and an awareness of that can really help identify, you know, in the moments when you’re like, Oh yeah, I sense fear, like, Where’s that coming from? Well, you know, that was probably a script that you grew up with. And then you can begin to work through that. So excited for your awareness of that. As you think ahead to this transition again, you’ve been in training for a long period of time, income’s about to go up. How do you feel like this scholarship is going to help you as you progress forward in your career?

Alyssa Falleni  08:54

Yeah, well, you know, a big part of why I applied for this scholarship was not necessarily for, you know, just the monetary award, but it was for that YFP Plus membership. It was being a part of a community that thinks similarly. It’s, you know, having that opportunity to get advice from people who are in a similar position. You know, as a pharmacist, we fall at a very interesting spot in healthcare providers. And so, you know, hearing from other people what they’ve done and in a similar career path, it does make a difference. It’s not the same as general financial advice, in my opinion. And so I think this scholarship gives me, really that community to become a part of that maybe financially. I you know, who knows if I would have found it, um, but I think hearing from those people and being a part of YFP Plus, and having, you know, the opportunity to see what other people are doing. Um. I’m also super excited for the book. I had a friend who lent it to me a couple years ago, and I got to read some of it before I had to give it back. But I’m excited to kind of have my copy and go through my financial steps, you know, as I read through that. So a lot of different areas, this has definitely connected me and made me feel a little bit more autonomous in making these decisions and not as fearful.

Tim Ulbrich  10:27

Yeah, I hear a sense of empowerment there. And you said something really important about community and being around like minded individuals, and so important in many phases of life. Here, we’re talking about finance. But you know, whether people engage with YFP Plus or they find another community that’s a better fit, so important that you’re being challenged, encouraged, supported by others that are on a similar journey. Community is huge, huge when it comes to making sure that we’re really progressing with our financial plan and really being challenged in the direction that we need to be growing as well. I’m gonna embarrass you for a moment and brag on you as we wrap up here and and read to our listeners just a segment from a letter of recommendation that came from a physician, Dr. Turner, that you worked with at the VA that speaks to you as an applicant, and I think why you really stood out to the selection community. Dr Turner had this to say: “Alyssa has a special collection of skills and abilities. She was able to excel on an interdisciplinary team with a variety of people from different backgrounds. She was universally well received, and I was especially impressed by her work ethic, humbleness, curiosity and ability to be flexible to make any team composition better and more effective. Alyssa has a rare combination of strong clinical skills, interpersonal skills, and a professional, hard working approach that brings out the best of those around her. I could, in good faith, recommend Alyssa to almost any team or project and be confident she would make the team stronger.” Alyssa, you should be proud of that. That is incredible. I don’t even know if you’ve heard that, seen it come in. So thank you so much for your application. Congratulations on the success that you’ve had thus far, and I really look forward to following your journey into the future. 

Tim Ulbrich  12:11

Momil, welcome to the show, and congratulations on being a recipient of the YFP Gives scholarship. 

Momitul Talukdar  12:17

Thank you so much. I am so excited. I was jumping up and down when I got the email about the YFP scholarship. I was actually standing in line to get Graeter’s ice cream. 

Tim Ulbrich  12:32

Good stuff!

Momitul Talukdar  12:34

Yes. So definitely celebrated with the extra scoop of ice cream when I found out! 

Tim Ulbrich  12:41

It’s funny, you mentioned jumping up and down. I was thinking before we hit record of when I think of Momitul, what I think of, and we’ve had the chance to cross paths a few times. We share a connection with NEOMED College of Pharmacy, and I have the opportunity to meet you several years ago, and in my brief encounters with you, I picked up on two things. Number one, is your joy. So when you said jumping up and down, that doesn’t surprise me. And number two, the passion that you have for the profession and the work that you are doing, and both of those things are contagious. And so it’s a pleasure to have you on the show and to be able to award this scholarship to you. Give our listeners a brief introduction of yourself, including what led you into the profession and the work that you’re doing right now. 

Momitul Talukdar  13:25

Absolutely. So my name is Momi. Last name is Talukdar, but most people will call me Momi. I had quite the journey into pharmacy, so I had a very non traditional route. So after undergrad, I did my undergraduate studies at the University of Cincinnati, and that is my hometown. So I lived at home while I went to college, and at that time in my life, I thought I wanted to become an optometrist. Long story short, optometry was not for me, and at the time, I was a little heartbroken when things didn’t work out. But, you know, life led me into doing a Masters of Science program in Tennessee and so, and I encountered a lot of people at that time, and you know, I really developed a lot of my study skills in my Masters of Science program that I did at Lincoln Memorial University. And so after that, I moved back home to Cincinnati to work at Mercy Hospital, and I worked at the scheduling radiology appointments, and when I was scheduling radiology appointments, I encountered nuclear medicine, and a lot of nuclear medicine patients, and I was responsible for reading a lot of their patient prep instructions. And radioactive iodine piqued my interest in terms of all the patient safety things that patients have to do before and after ablating their thyroid with radioactive iodine. I actually reached out to the nuclear medicine manager, Ingrid, at the time, and I asked her, I’m like, Hey, like, this sounds really cool. Like, you think I could be a nuclear medicine technologist. And she said, yeah, like, go for it. I think it’s a very rewarding career. So I applied to Mayo Clinic. Mayo Clinic’s nuclear medicine technology program, and got accepted. And through my time at Mayo is what opened my eyes to pharmacy actually. I had a rotation at a nuclear pharmacy that’s on Mayo’s campus, and that was a 4am shift. And when I first got my schedule, I didn’t think I was gonna like it. I really thought I was gonna dread this rotation, like, you know, I’m just gonna try to, you know, get through it. I ended up loving it. And I ended up doing a project with the nuclear pharmacist, Dr. Andrew Paulson at Mayo Clinic. And you know, long story short, he convinced me to go to pharmacy school. And after, you know, some thought in the cold Minnesota morning, at 4am I decided to go to pharmacy school. I wanted to move back home to be close to my parents in Ohio, in Cincinnati, and I actually interviewed at NEOMED. And right from the start from the interview, even after the interview, I reached out to Dr. Jackie Boyle, and I asked her, What nuclear pharmacy APPY rotation opportunities there were, if that was my career goal, that was why I was going back to pharmacy school, is to become a nuclear pharmacist. And just after speaking with her and all the opportunities that she presented to me like, yes, we do have a nuclear pharmacy. APPY rotation. I picked NEOMED to pursue my pharmacy education. I know it’s a kind of a long story there, but that is really how I came into pharmacy, and especially nuclear pharmacy.

Tim Ulbrich  17:20

Bringing it full circle, today is day one, when we’re recording, of your job as a nuclear pharmacist. So tell us a little bit more about the position you have entered into.

Momitul Talukdar  17:30

Yes, so if anyone is familiar with the nuclear medicine world, so you have PET and then SPECT. So what does that mean? So this is referring to the two types of cameras that you’ll see in nuclear medicine. So PET is your positron emission topography cameras, and you are mostly dealing with oncology patients, and you’re looking at the metabolism of a tumor. And a lot of oncologists love to order PET scans to see a progression of a tumor, if it’s benign, if it’s malignant, okay, great. So then the other side is SPECT. And these radio pharmaceuticals that we deal with, spec cameras, they have a longer half life than your PET radio pharmaceuticals. Pet radio pharmaceuticals are very quick. SPECT is more diagnostic. So, S, P, E, C, T, so  Single Photon Emission Computed Topography cameras and so say you have gastroparesis, and the gastroenterologist wants to see how fast or slow food is moving through your stomach and your GI system. So they’ll probably give you a gastric emptying scan, and that is basically eating radioactive eggs in the morning and with sulfur colloid technetium, 99m sulfur colloid eggs. And after the patient digests or eats that very big breakfast, we have them come in and take pictures with two SPECT cameras at the one hour mark, three hour mark, six hour mark. That’s like one of hundreds of SPECT studies that are out there for nuclear medicine. My position is PET, so I will be dealing with a lot of the therapeutic side, not quite diagnostic side, of nuclear medicine. So it’s not chemotherapy. Often times that pet radio pharmaceuticals, or a lot of therapeutics in nuclear medicine, get confused with chemo. It’s a little more direct than chemo and less adverse side effects than your average chemotherapy that oncology patient would go through. But I do love the behind the scenes nature of nuclear medicine. I am a very much early bird, so a lot of radio pharmaceuticals are produced early in the morning, 12am 1am 4am because these radio pharmaceuticals are teed up for your 7am/8am patients, whether it be a treatment or a PET scan.

Tim Ulbrich  20:17

Well, congratulations on you know, you talked about the journey and progression to Mayo and the interest and the pharmacist that led you there, which led to pharmacy school, completion of pharmacy school and the job. So congratulations on the progression and achievement of that. I think I just learned more about radio pharmaceuticals. I don’t even know if that’s the right term, than I ever did in pharmacy school. All right there we go. And I also learned that I’d be a terrible spec patient because I don’t like eggs, and I definitely don’t like radioactive eggs, so hopefully I don’t ever need that therapy. But what will make do. Yes, shifting gears to the scholarship. In your application video, you talked about the magnitude of student loan debt that you and to be frank, many of your peers, are facing upon graduation and beyond the $1,000 award that’s associated with the YFP Give Scholarship, which, let’s be honest, any little bit helps, right, but that’s going to put a small dent in and the overall magnitude of we think about the average student loan debt today is about $160,000 for the graduate. So my question here is, how will the scholarship and the materials help you, as you make this transition as a from a student pharmacist to a new practitioner?

Momitul Talukdar  21:30

Yes, so as we know, transitioning from a student to a pharmacist is a little tough, because now I’m not reliant on student loans that I have been for the last four years, moving into our apartment, getting new furniture, just setting up a new life for myself. I know I’m no longer a student and the responsibility of a practitioner is a little bit bigger, but what I learned early on from my mentors is that when I was an API student, I had the mentality that I was an employee, and now that I’m an employee, I had the mentality of a student, and this way I always like to learn, and I always like to be in a growth mindset. And I say that to say transitioning from any position in life, whether you be a student, an employee, mentality or not, it comes with a financial burden. Moving is not easy, and nor is it cheap, and just setting up a whole new life for yourself. I lived on campus, so I had to benefit a lot of benefits you know, as a student that now I don’t have now that I’ve graduated, which makes sense right now, I have a paycheck that’s coming to me,but I say that to say it’s definitely eased my transition from student to practitioner. This scholarship has, yeah. 

Tim Ulbrich  23:01

I think you highlighted something that’s really important is that there is a lot of transition, both in financially, you know, no debt, to finally earning an income. Often there’s relocation that comes with expenses, as you mentioned, and so important in that transition to be setting a strong foundation for the rest of your career. So I’m excited for you, Momi, on what lies ahead into the future, I look forward to following your journey and staying in touch as well. And again, congratulations on being a recipient of the scholarship. 

Tim Ulbrich  23:32

Perry, welcome to the show, and congratulations on being a recipient of the YFP Gives scholarship.

Perrigrine Garner  23:38

Thank you so much.

Tim Ulbrich  23:40

Let’s start, if you could give our listeners a brief introduction of yourself, including what led you into the profession of pharmacy and some of your career goals after graduation. 

Perrigrine Garner  23:49

Sure. My name is Perrigrine Garner. I am currently a p4 at the University of Toledo, College of Pharmacy in Toledo, Ohio. What led I’m a non traditional student, so I like to throw that out there first. I’m a mom of three daughters, so I decided to go back to pharmacy school in my 30s. A couple reasons was, first of all, I’m a person with physical disabilities, and I just noticed in the healthcare setting, there was a disconnect between different providers and services for people with chronic conditions and disabilities for throughout their lifetime, and I wanted to go into pharmacy to not only educate myself to better my physical disability symptoms, but to assist others in helping them as well, and kind of close, try to close those gaps in access for people with disabilities and just healthcare education as well, and then also, my great grandfather was a pharmacist, and he managed and owned local pharmacies back in the 30s in Toledo and Sylvania, Ohio as well. So following that family.

Tim Ulbrich  24:55

I think the synchronicity is really incredible. You shared with me right before when we hit record that you happen to be living in Toledo, which has some big aspirations of becoming the most accessible city in America for those that have disability, and for you to be there with the goals that you have, I think is a really cool opportunity for alignment into the future. So tell us more about some of the career goals that you have after graduation.

Perrigrine Garner  25:20

For sure. So my biggest career goal, my dream, is to open an independent pharmacy, or have some sort of pharmacy business that caters to people with disabilities and chronic conditions, and that it makes it more accessible for them to access healthcare and medicine to make their lives better throughout their entire lives. And so I developed relationships with local nonprofits that help people with disabilities, for example, the Ability Center of Greater Toledo, and they are the ones that their mission statement right now, with their new CEO, is to make Toledo the most accessible community in our country. So we really my thought process and my ambitions really align with their goals as well.

Tim Ulbrich  26:05

It’s exciting. I look forward to following that into the future. We had a great conversation before we hit record about some of the directions that that might be able to go and really sense the vision and the passion that you have for that. You are recently recognized as a recipient of the 2024 US Public Health Service Excellence in Pharmacy Award. Tell us more about your work and impact that led to that award. 

Perrigrine Garner  26:28

So I want to, I want to state that was a complete shock. It was a complete surprise, and honestly, so what had happened was there was an opening for pharmacy director for our Community Care Clinic, which is a nonprofit, free clinic for people in need in the Toledo area community that is a student run by students, medical students, pharmacy, nursing, all different groups Through the University of Toledo. We have a little space in a church down the road where we help people every Thursday. And I just said, You know what? When that position came up, I said, that is exactly what my passion is, is to help people in need. So I’m gonna apply. And I got the position, and I just did what I thought was right. And I just said, Okay, we need donations. You know what are some ways I can just help people. And then I I realized that the Ability Center of Greater Toledo, like I’ve mentioned before, they take donations and but then I mentioned to them, like, oh, are there some items you can’t use through, you know, your services? And they said, Oh, yeah. Like, we have certain items. And I said, Well, we can use, we can use those items. Are we have items possibly you could use? And they’re like, Yeah, so I actually just developed this, continue to develop a relationship with them, and would get donations for the clinic. And I just, I just did what I thought was right, and I would just stay all night at the clinic, helping people, helping the students. I really wanted to educate students on how important it was to help people in need in our community. So I’d go to all the travel clinics and just try to really educate how important it is to help people and that I truly feel. That’s what led to that award, because, like I said, I was just doing what I thought was right and what I’m passionate about. And then one day I came into class, and all the staff of the university was there, of the college, and I was like, what is happening? 

Tim Ulbrich  28:23

What is going on?

Perrigrine Garner  28:27

So overwhelmed with joy, I was just so thankful for that to be recognized.

Tim Ulbrich  28:32

That’s incredible. And I hear what you’re saying in terms of, you know, some of the shock and surprise, it sounds like it was very well deserved. So congratulations on that award. I want to talk about resilience for a moment. You know, that was something that really struck me, and I think struck our scholarship committee as we reviewed your application, your letter writer spoke to it as well. But as a mom to three daughters, and someone who has openly shared some of the personal struggles with cerebral palsy, with a disability, what what has been your secret to staying resilient and maintaining a positive attitude that’s allowed you to lean into the efforts, the work that you’ve done, the impact that you’ve had, and even as you think ahead to the goals that you have.

Perrigrine Garner  29:12

For sure, you know what I love to say, so starting in pharmacy school, I was nervous about how I would do physically. I knew I had the mentality to get through pharmacy school, but with my physical conditions, I have, like, I get weakness and pain and that sort of thing. But I said, You know what? What’s the worst that can happen? So I was just like, I’m just gonna give it my best try and go and honestly, my education through pharmacy a lot of the clinical aspects of it, and learning about my body and symptoms has really helped me. So it it’s like that’s what has helped me through this pharmacy school has helped me through pharmacy school, and just thinking of my kids and knowing I went into this to better the lives of my children and better the lives of other people with disabilities, that’s just what kept me focused. And there were times I’d be sitting in class in tears because of just being in pain, but I said, You know what? It’s just a feeling, and then just push through it and keep studying and keep doing your best. And I would at some points, I even was going to physical therapy within the hospital or college is located in between classes, just to keep pushing through, because I knew if I could get through this, I would be able to help more people in my position.

Tim Ulbrich  30:32

And you said something there, Perry, that I want to reflect and mirror back to you, because I think it’s a really important point as you think ahead to the big goals that you have and the impact that you desire to have, and I think are going to have on other people. And you said, What’s the worst thing that can happen? Right? When you talked about going through pharmacy school, what I hear there is an openness and acceptance to step into something that’s unknown. And perhaps that means failure, however we define that, or perhaps that means success, but not letting that fear get in the way of taking that important step. And I just want you to hear that, because that’s going to be if you can hold on to that as you step into these next phases, whether that be as a mom or eventually as a business owner and this vision that you have to help others, the vision and the impact that you want to have is great, and in order to step into that, it’s going to require running up against that fear and being willing to kind of push through that, and it will involve some failure here, there along the way. That’s part of taking risk. And I think you obviously have done that once, and I look forward to you continuing to do that in the future.

Perrigrine Garner  31:36

Yeah, thank you. I’m so excited.

Tim Ulbrich  31:39

As you think about this scholarship, there’s a monetary component. There’s some other resources that we’re providing with this as well. What role will this scholarship play in helping you as you make this transition into your final year of pharmacy school and eventually as a new practitioner?

Perrigrine Garner  31:54

Yeah, so this scholarship was very, very important. So I want to preference with for my bachelor’s degree. Thank goodness I was able to get enough grants and scholarships to do my bachelor’s degree. But then when I realized the graduate part of it, I was have a struggling with grants and scholarships, and so this is contributing to that, and where I don’t have to pull as much loan for that. So I just spoke with Tim Baker the other day, and he says the average student loan debt for a pharmacy student is about $160,000 which is crazy to me, but I’m going to be at about $80,000.

Tim Ulbrich  32:39

 Let’s go.

Perrigrine Garner  32:40

Every penny, every dollar helps. And this scholarship, I actually immediately bought the NAPLEX prep guide book because I knew that was something. It’s expensive. And I said, You know what? This is going to help me push forward through my education and studying and to do that exam. And then, honestly, like, I have got the book right here. I’m already, like, halfway through, and I’m just making goals and plans for my financial success. I’ve had a lot of setbacks, but I feel like I’m on the right track, and this is definitely an amazing tool to help me through this. 

Tim Ulbrich  33:17

Perry you’re embodying something I think is really important for any other students that are listening is, you know, I think sometimes it’s sometimes it’s easy to look at a $500,000 or, excuse me, not, 500,000 a $500 or $1,000 scholarship, you know, is, hey, what impact is that really going to make, right, when I’ve got $100 or $200,000 of debt, or perhaps when it comes to, you know, taking out loans each semester, you know, does it really matter if it’s another $1000 or $2000 and the answer is, yes. It does mathematically. But what you’re really highlighting is it’s it’s really a mindset thing as well, because you know, when you make some of these micro decisions over and over and over again, that’s how you’re able to graduate with $80,000 instead of $160,000 and that’s going to give momentum as you make this transition, and through having a reduced indebtedness as someone who also wants to own their own business, that’s an important thing, right as you’re making those next steps financially as well. So just admire the great work that you’ve done on behalf of the YFP Gives Scholarship Committee. Again, I want to say congratulations, and you certainly have earned this award. We’re excited to be able to administer the scholarship, and I wish you the best of luck going forward.

Perrigrine Garner  34:25

I really, really appreciate it. Like I said, every penny counts, and it’s just, it’s just a wealth of information as well. So I really appreciate it.

Tim Ulbrich  34:32

Thank you, Perry.

Perrigrine Garner  34:33

Thank you.

Tim Ulbrich  34:36

Ruth, welcome and congratulations on being a recipient of the YFP Gives scholarship.

Ruth Adeyemi  34:41

Thank you very much. I’m very excited about that. It definitely met a need for sure. Well, let’s

Tim Ulbrich  34:47

Start with a brief introduction of yourself, including what led you into the profession of pharmacy.

Ruth Adeyemi  34:54

Yes, so my name for everybody listening, is Ruth Adeymi, and I’m a fourth year student at the University of Florida College of Pharmacy. Highly passionate about advancing health equity, particularly in underserved population. And I say I mentioned that because my passion for pharmacy actually stemmed from watching my uncle growing up. He passed away already, but then when I was growing up, he was just very devoted to his profession, and a lot of people nearby even thought that he was a medical doctor because he cared for his patients beyond what your average pharmacist would do. And then that led me to wanting to be more like him and also to carry on his legacy. And what I saw now that I’m grown is that in the rural areas in Nigeria, you have pharmacists that they’re very transactional. And then when you look at the urban areas, that’s not the case, because they they take their profession more seriously. Once you, you know, offer counsel and make sure that the patient understands why they’re taking the medication. But then when you look at the population of Nigeria, about 60% is rural, so the majority of the population are not getting that counseling. They’re not getting that pharmacy based care, you know. So my goal is looking at what my uncle did. Just wanted to go back home to promote the need for patient focused care, ensuring that counseling is a part of everything that we pharmacists and patients can actually trust us to do our job, to ensure that when they’re taking that medication off the counter, they know how to use it, they know when to use it, and they know what not to use it with and what to use it with.

Tim Ulbrich  36:37

I love that, and I shared with you before we hit record that you had a beautiful letter of recommendation that was written by one of your professors, Dr. Whitner, from Florida College of Pharmacy. And in that letter, one of the things that was mentioned building on what you just shared, is, “Ruth stated to me during one of our first meetings that following pharmacy school, she hopes to change the infrastructure of Nigerian pharmacy practice.” So you’ve done a great job of articulating that vision, obviously, to other people as well, and thank you for sharing it with us here. I want to ask you about your involvement in chartering a new pharmacy chapter of SNAFA, which is a national pharmacy organization whose mission is to serve underrepresented minorities and underserved communities, and chartering that new chapter at the University of Florida College of Pharmacy. How did that, or how has that impacted your development as a leader within the profession of pharmacy?

Ruth Adeyemi  37:32

Yeah, I like that question so much, because one thing for me is wherever I find myself, always looking for opportunities to promote and advance underserved communities. And when I came to the University here in Jacksonville, we’re literally positioned in an area where there is a need, you know, and realizing that we don’t have a student organization that focuses on meeting those needs and going out to share, you know, to the different marginalized communities on how to take their medications, you know, and even like, just different explaining to them when a vaccine is needed, explaining to them when a medical intervention is needed. To me, that was alarming. And then, you know, having Dr Whitner, who is also very passionate about underserved communities, when she raised that question of, you know, having an establishing a SNAFA chapter in Johnson, though it just clicked for me, because it was like two passions meeting two passionate people is meeting and wanting to achieve a common goal, which is ensuring that even the student population understands why it’s important to have an organization that is centered on promoting and advancing health equity in underserved population so and also using my expertise and the knowledge that I’ve gathered over the years, just working in Nigeria and working with Nigerian students for the vision that I just shared with you, that also helped in chartering this Chapter in Jacksonville, using the different knowledge that I’ve gathered from doing that and bringing all of that into chartering SNAFA in Jacksonville. And so far, I’d say that just starting this chapter has really helped me to number one when starting any initiative like this, first of all, just understanding like the needs of the community. That’s very important. Because when I started the compassionate pharmacy practice project, which is a project that I’m working on back home to advance pharmacy practice, that wasn’t one of the things that I did initially, just trying to understand the need of the people, but with chartering SNAFA here in Jacksonville, it definitely helped me understand the importance of knowing what the need is in the area and using that information to put together events right put together initiatives that would actually meet the needs of these people. So I’d say that this organization is definitely helping me and building me to become that health equity leader that understands those basic aspects of putting together an organization, and I’m hoping to use that knowledge to use the knowledge that I’ve gathered as I move on in my career.

Tim Ulbrich  40:13

Yeah, and it’s clear to me that you’re a builder, a creator, an innovator, which excites me. We need more of those in the profession of pharmacy, so that that is definitely exciting. It’s evident through the work that you’ve done in starting that SNAFA chapter you mentioned the compassionate pharmacy practice project initiative, and another I want to ask you about. You also started the SARM life Digital Skills Program, which to date, has served and coached over 100 African women across the continent, in Nigeria, Ghana, Ivory Coast, Kenya and Senegal to capitalize on the digital surge in an effort to build their professional brands. Tell us more about this initiative and how it came to be in the work that you’re doing. 

Ruth Adeyemi  40:52

I love that you asked it that way, because this initiative is very dear to my heart. When I graduated from undergrad at Jacksonville University, and my original thought was to go home say hello to my family, because I had not seen them for four years. So I wanted to go home to see my family, and then come back to the United States, because I already had my admission to go to University of Florida. But on going home, that was not the case. Funding became a huge issue, and because of that, I had to defer my admission for a year. Now, during that one year of deferring my admission in Nigeria, you have a one year service to the country program for those who would like to work in the country eventually, and based on what I’ve told you about my passion for going back home. That’s something I have in mind. So one of my mentors told me, You know what, Ruth, enroll for this program. And that’s what I did in 2019-2020, enrolled in the National Youth Service Corps. That’s what it’s called. And during the first month of the one year training, we all get to be together, the batch. We all get to be together, and then we learn different skills. We get trained, and then we get dispatched to the different states in the country. So during my time getting trained, I decided to learn digital skills, and then I learned, like, one other skill trade. But the digital skill was very dear to my heart, because I just started my website, actually, where I was talking about, you know, my travel to New York City, because, you know, I’m coming from, like, a very small village in Nigeria. So I just wanted everybody that, yeah, so with the digital skills, uh, training, every knowledge that I get in there, I put it into my website, and I saw the growth. So I share that online. And from there, people just wanted me to coach them and teach how I was able to grow my website within a short span. And I love teaching. I love to see technology. So that’s how my blog became. It turned into a business which is now storm life. Now what happened a few years later, a year or two later, was was started as just a passion, you know, for sharing information online via blog, became a business that come last year, was able to pay my tuition before paying my tuition for school. It was able to cater to my needs when I was in Nigeria and even when I moved back to the United States. So I thought about it. If having a digital skill, owning a digital skill, could impact and change my financial journey this way, I also want other people to experience that. The unemployment rate in Nigeria is quite high, and we as citizens can contribute to reducing that so that, that was the thought process that I had, you know, and then I started the summer live digital skills internship in 2020 that was the initial language that we used the Covid year. And we had a lot of students that joined. They just wanted to do something, because everybody was inside. And from there, you know, we thought about it and decided to grow the initiative from just focusing on Nigerian and Nigerians to expanding so this year and we expanded into different African countries, Ghana, Kenya, Ivory Coast, Senegal. And we had about 133 students this year that trained on eight different data skills, and I had to hire like coaches and these skills to ensure that they’re getting the best knowledge. So for me, it’s a journey of financial freedom, so to speak, and just wanting other people to benefit from that. 

Tim Ulbrich  44:35

And while, while there is a piece related to your own financial plan, there’s also a contribution component, right? There’s a building and skill development, and I love that. To me, those are the best kind of businesses when you can provide value and fulfill an unmet need while also growing a business that’s going to have positive financial benefits to yourself and allow for other contributions to be made as well. Those are the best kind of businesses to be building. So I look forward to watching that grow. We’ll link to the SARM Life Digital Skills website in the show notes if our listeners want to go and learn more about that work. Related to that you shared with me right before you hit record, that you’re in the final editing of two books, not one two books. And by final editing, I mean like coming out within the next week. At the time of this episode going live, those books will be out. So tell us more about those two books.

Ruth Adeyemi  45:28

Yeah, so the first book is Mastering the Art of Blogging for Your Brand, and this book literally walks a blogger or a potential blogger, through the journey of blogging. Everything you need to know, from what website platform to use, what themes to use, what plugins to use, and even how you could build a sustainable blogging business, so everything from A to Z, that’s what I’ve included in this book to ensure that a new blogger can use it and get good results. Then the second book is Mastering the Art of Search Engine Optimization for Brand Growth. Now, with blogging knowledge, what ensures that your blogging efforts is successful is understanding search engine optimization so earchers and users can see your information on search engines. So with this book, you’d understand the different aspect of search engine optimization, the different strategies, from local SEO to technical to content, every aspect of SEO to ensure brand growth on search engines. So that’s what those two books are about. I’m very excited, because it’s my first time publishing books ever.

Tim Ulbrich  46:40

It’s a big project. It’s a big lift. So I admire the work that you’re doing there, while completing your PharmD, while running the business, while doing other all these other things. So we will also link. We don’t have that information at the time of recording, but by time we go live, we’ll have some information on how folks can learn more about those books and get a copy if they’re interested. So we’ll link to that in the show notes as well. Ruth, I have just a ton of admiration for the work that you’re doing, the goals that you have for the future. It really was an honor on behalf of the YFP Gives scholarship committee to be able to award you this small monetary award, I think, is a recognition of the amazing work that you’re doing. So again, congratulations and thank you for taking time to come on the show. 

Ruth Adeyemi  47:21

Thank you very much. Thank you for the opportunity as well.

Tim Ulbrich  47:27

Ai Len, welcome to the show and congratulations on being a recipient of the YFP Gives scholarship.

Ai Len Nguyen Phan  47:33

Thank you. Thank you, Tim for having me here.

Tim Ulbrich  47:36

Well, let’s start. If you could give our listeners a brief introduction of yourself, including what led you into the profession and some of your career goals after completing your industry fellowship, upcoming this year with Rutgers and Genentech. 

Ai Len Nguyen Phan  47:50

Again, first off, thank you, Tim for inviting me here today. I’m grateful for the opportunity to share my journey and story. Hello. My name is Ai Len Nguyen Phan and I am a pharmacist currently completing my second year as a Rutgers industry Fellow at Roche Genentech in South San Francisco. I grew up in Northern California and went to University of California, Los Angeles for my undergrad, and then I moved over to Baltimore, Maryland and attended the University of Maryland, Baltimore School of Pharmacy. I graduated back in May 2023 with my PharmD and Master’s in Regulatory Sciences. And then I moved back to California in July 2023 when I started my two year fellowship at Genentech. During my first year, I was with the medical information and communication team supporting the oncology and target therapies team, and then this year, I am with the medical science liaison team supporting rare blood disorders. So pretty much what got me into the profession is growing up in a family of my father worked in the healthcare system, and pretty much my uncles and aunts were all in the healthcare system. So growing up, I’ve always had this mindset of I want to be in the same setting, working setting, as they were all in. And so it’s never something that my parents pushed me to be in. It’s something that I have just grew up loving seeing the different stories that they share with me, the different experiences of meeting different individuals and how they are able to help them in small or big ways. So then that led me to really looking into pharmacy. And so that’s why I pursue pharmacy, first off, and then after the first year Pharmacy school, I got an internship with a company in Carlsbad, California. Love what I did. It was in rare diseases, and so seeing the impact again with helping people in a different way, different setting, I really fell in love with that. So I got the opportunity after my internship, and they offered for me to stay on as a part time. So I was able to be in the industry for almost four years throughout pharmacy school. So I grew in terms of my experience in industry, learn the ways of you know, like what medical affairs consisted of. And so here I am with the USMA team, or the medical affairs team at Genentech, but what my career goals are. So currently, I am completing my second year in the fellowship. I would love to stay within the medical affairs team, there’s just a lot of strategies and excitement and seeing how products go from, you know, a small molecule into the approval and seeing the amount of patients that we’re helping with the even in the rare space where there’s no treatment, or if there is treatment to cover any of that unmet medical gaps, is really fulfilling to me. And so that is my goal, short term, but long term, I would love to, you know, expand more within medical affairs or even in other functional areas, just because within the pharmaceutical industry, there’s so many opportunities. And importantly, I would love to be a mentor to those in that are in pharmacy school, in college, considering pharmacy or early in their industry careers, because I wouldn’t be here without the mentors that I have and then so still very new in my career journey, with a lot of things to learn every day, but outside of work and professional life, one of my professional goal, personal goals is to increase my financial and investment literacy. So I am thrilled to be here and speaking with you. 

Tim Ulbrich  51:47

Well that’s an exciting journey. And one of the things I want to highlight there, especially for any students that are listening, is what I heard was some internships very early in your career that opened the door to different aspects of the profession, how you could use your pharmacy degree, which, obviously those experiences led to pursuing fellowship, and now the career path you’re going to go, and I always am encouraging students to make the most of the seasons of internship that you have, right? There’s only so many of them before that partly gets the dictated for you, whether that be on IPYS or APYs is you only have so many options and choices, and really using those internship opportunities to pursue some more of the quote, “non traditional pathways”, and to explore the many different aspects of the profession that a pharmacist could go. So love that journey, love what you shared there. And I can really tell you know how mentors, preceptors have influenced you and your desire to give back in that area as well. One of the things, before we talk about some of the financial stuff, your application really centered around resilience and determination as two characteristics that you have embodied, that have helped shaped who you are today, and I suppose, will help you as well into the future. Tell us more about that resilience and determination and where that comes from? 

Ai Len Nguyen Phan  53:04

I would say the resilience and determination comes from my family background, and I see it through my father and mom. But pretty much, you know, I moved here as an immigrant when I was eight years old. I didn’t really know English, really struggle in school, and for years, faced bullying, but through that, I still continue every single night, I remember opening the thesaurus and the and the dictionary and learning from A to Z all the words in there. And I don’t think by the time I became proficient in English, I got through all the words in the alphabet the dictionary. But, you know, every night, I continue to learn each word. I learn past, perfect tense and all that, and continue to see the progress from there I saw, you know, it took me a long time to get to be able to be proficient in English. And so being able to get through that, and then understanding the language, being able to speak it well, has made me feel like, okay, if I can do that. There are other things in life that in the moment it gets difficult, but just determination. And I do think a little bit luck here and there, when opportunities come up, take them. They do help. But I would say for me, going through one hardship, really focusing on, like, what are my goals now? What are the long term goals? And working towards them has always gotten me to where I am today. So, like, going from learning English to then, you know, getting into being a first generation in college where my parents didn’t go to college here, so they didn’t know, like, what the SAT was, or, you know, like you needed to take the SAT to get into college at the time. And so me, just hearing people talking about it, and being curious, I just started to study for this exam, and being able to get into, like a really good university, and making my parents proud, being the first generation student, and from that working really hard to get into pharmacy school, and then now getting a fellowship, which is something that is also not the easiest thing to do. So I think for me, it’s always been putting my, setting goals, working really hard towards them, and then when I do face conflict, I reach out to my mentors. So I think the theme for me has always been, reach out to your support system, get their input. And then, you know, seeing those advices and seeing what works for me at the time, it makes me comfortable to take those actions or advice that they have shared with me and then implementing that in my strategy to reach my goals.

Tim Ulbrich  55:50

Yeah, and I think that mindset, as we transition to the financial aspect, I think that mindset I see is already translating for you on the financial side, one of the things that you mentioned in your submission was that the weight and burden of six figures of debt is real, and the impact of that debt is real when it comes to, you know, other expenses that can fit into the budget, being able to save and invest for the future. And as I shared with you before we hit record, I think sometimes as fellows, residents or even other new practitioners, there can be this mindset of like it is what it is like I’ll take care of in the future. I don’t really have the time or the money to kind of worry about this right now, but you’ve taken a different approach, which is, you’ve started to make student loan payments, you’ve applied for this scholarship, you’re pursuing opportunities to increase your financial literacy. And so that’s the mindset that I’m referring to it, and I’m curious, as you reflect on that, what keeps you motivated to have that long term mindset while taking one step at a time right now, even though those may not feel like big financial decisions you’re making in the moment, but that allow you to keep momentum without getting overwhelmed.

Ai Len Nguyen Phan  56:58

Tim, I would be honest the first time when I looked at my loans and I opened my No Net and I saw the amount, it was so scary to me, because when I went through college and even going through pharmacy school, I knew that I had loans, but just being able to open my account and seeing those numbers, it then hit me that at one point in my life, I am going to have to repay this. And so I was very lucky in a situation where I started work so I was able to work while I was in pharmacy school, and my motivation was really seeing those numbers each month or each paycheck that I received going down as I was making the payments and at the time as a student and based on what I was making, I did a different approach, where I don’t think I would be using the same approach once I later on, after I am done with my fellowship, but I tackled those loan groups that I knew I could afford and afford to pay off. And so over time, throughout four years, I was able to pay off multiple groups of loans, and that kept me motivated, and then I saw the numbers slowly going down. And truly, for me, it’s also a psychological thing where I was very happy and satisfied that I’m slowly making progress, but I’m also always I’m a planner. I think about what are my goals later in life financially? I want to be able to afford a home. I want to be able to live comfortably where, you know, I don’t have to live paycheck by paycheck or being worried that I have such a huge debt that I owe to their, you know, like in terms of loans. So for me, that has been kind of the mentality now, going being a fellow, I would say, you know, being a fellow now, I am making more than I did when I was a pharmacy school. So then again, it that motivation where, okay, if I was able to make payments while I was in pharmacy school working, I should also be able to make a payment now, especially if I’m making a little bit more and so. So then I think it helps me. I feel like what I’m doing now will ease the worry and the burden later on in the future, and again, always sticking to those long term goals, which is being able to be financially stable one day.

Tim Ulbrich  59:31

A lot of richness in what you just shared there. And you know, I think as as I heard you say, like, hey, when you think about your student loans into the future, you might have a different approach in terms of how you tackle those but as a student, it was all about momentum. It was about traction. It was about not getting stuck. And you know that meant going after the ones that you could tackle based on what you’re making as a pharmacy student at the time, and that is so important, we underestimate that in the financial plan. Yes, we’ve got to worry about interest rates and all that stuff. All. Important that we nerd out on it, but momentum is such a driver of the financial plan and progress, especially when we think about doing this over a long period of time. You know, with our careers, I often say that the financial plan, it’s a marathon, it’s not a sprint, right? We have to maintain that momentum, and this is what Darren Hardy is talking about in his book, The Compound Effect, when he says that small, consistent choices over a long period of time equal radical difference. It’s the compound effect. It’s the momentum. And obviously there’s strategy to be had there. But I love that you were thinking about momentum even when you’re in pharmacy school. That is great. Let’s talk about the future. So you mentioned in your application you have a 10 year timeline as a goal for paying off your loans. I think you’re going to do it faster than that, but let’s assume that it is 10 years from now. We wake up, it’s August, 2034 which is weird to say that out loud, it’s 2034 you’re debt free. What else is going on? What are the financial goals would you like to accomplish in this first decade of your career?

Ai Len Nguyen Phan  1:01:02

Yeah, I would say, you know, looking thinking about 10 years from now. So by then, I hope I would already, like, I said, own a home, financially stable, living comfortably. But also I really want to dive into real estate. I feel like that’s something that has always been a goal of mine, or at least thinking about it, or seeing I’m always either real estate, a parking lot or a laundromat. Those are like the three things that I always think about investing in. But truly, before even diving into those, I just think that, you know, like I want to take care of myself, but again, the core of my success has always been my family, my parents. So I do want to also be able to financially invest in them in one way or another, either it’s their retirement home or just their retirement plan. But then also thinking about my retirement plan as well, and thinking of what investments I can make during that time. And like I said earlier, when I was introducing myself, one of the things that I want to be able to do is gaining increasing my financial and investment literacy, just because I don’t feel like I am there yet to comfortably make any decisions. And I think that is somewhere that 10 years from now, I hope to achieve that by then, and at least have my own retirement plan established, as well as a investment plan.

Tim Ulbrich  1:02:32

Well, I have no doubt that you’re going to figure all of that out. I hear a lot of different goals around not only the paying off the debt. I hear goals around financial independence, whether that be through traditional investments, real estate, etc, I hear goals potentially in owning some businesses, supporting family as well, right? And that that’s the clarity that I’m often encouraging new practitioners to really spend some time thinking about hard to do when you’re in postgraduate training. You got a busy schedule, but we want to have a North Star for our financial plan, so as you’re paying off debt, as you’re saving and investing money, like what’s the purpose? What’s the why? Where are we trying to go to make sure that we’re finding that balance that we so often talk about between living a rich life today and also planning and saving for the future? I look forward to following your journey. We’ll have you back on the podcast. 2034 we’ll get an update, see where you’re at. But in all seriousness, Ai Len again, congratulations on being a scholarship recipient, and I’m excited for what lies ahead for you.

Ai Len Nguyen Phan  1:03:26

Thank you, and thank you again to you and the committee for believing in me. And I’m so grateful for this scholarship. I do truly believe every dollar counts, and so this will really help me too with my financial burden. So thank you for having me again.

Tim Ulbrich  1:03:42

Well, there you have it, five incredible stories of the first round of winners of the YfP Gives scholarship. If you’d like to learn more about the efforts that are happening within YFP Gives, our nonprofit, you can visit YFPgives.org from there, you can learn more about the scholarship as well as participate by donating. As always, thank you so much for listening to the YFP podcast. If you found this episode to be helpful and insightful, do us a favor and leave us a review on Apple podcast or wherever you listen to your shows each and every week, we’ll catch you next week. Take care.

[END]

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YFP 371: 5 Wealth-Building Strategies to Become a Seven Figure Pharmacist


Tim Ulbrich, YFP Co-Founder and CEO shares five wealth-building strategies to include in your own financial plan.

Episode Summary

In this episode, Tim Ulbrich, YFP Co-Founder and CEO, shares five wealth-building strategies you can incorporate into your own financial plan. Drawing from his own financial journey, these strategies have been tested, refined, and used by Tim and his wife, Jess.

From setting savings goals to tracking net worth monthly to increasing your financial IQ, Tim makes setting up your financial path for success more attainable.

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

  • Wealth-building strategies for pharmacists with student loan debt. [0:00]
  • Financial struggles and debt repayment for pharmacists. [3:21]
  • Financial planning for pharmacists, focusing on strategies for success. [8:28]
  • Tracking net worth and setting savings buckets for financial goals. [12:33]
  • Financial planning, saving, and investing for pharmacists. [17:41]
  • Wealth-building strategies and financial planning. [22:33]

Episode Highlights

“And I had realized that despite the amazing opportunities that graduating with a pharmacy degree had offered, there was a little discussed truth among practitioners in the field. And that is that most pharmacists make a good income, but have significant student loan debt and feel like, hey, there should be more here; I shouldn’t feel as stressed and overwhelmed as I do with my financial situation.” – Tim Ulbrich [2:52]

“But it takes a lot of intention, time and effort to translate that income, to making sure that we’re actually progressing in our financial plan and finding the ever so important balance between saving for the future while also living a rich life today and investing in those things that are most meaningful to us.” – Tim Ulbrich [6:46]

“We learned a very important lesson that there is no such thing as arrived. When it comes to the financial plan, there is always an opportunity to grow and learn.” – Tim Ulbrich [7:25]

“These strategies are not overly complicated. It doesn’t have to include fancy spreadsheets and nuanced investment vehicles. It doesn’t take an exorbitant amount of time. And it doesn’t mean that you have to live on rice and beans. I did it and you can do it too.” – Tim Ulbrich [9:36]

“I want you to take a step back and ask yourself a few questions. What am I trying to accomplish? What’s the purpose? What does success look like? After all, money is a tool for living a rich life. And it’s up to you to decide what that rich life looks like.” – Tim Ulbrich [12:04]

“Resist the urge to try to do too much. And eventually getting to a place of frustration where you don’t make much progress at all. What is the one next move that you can make? This is a marathon, not a sprint, one step after another over a long period of time will yield big results.” – Tim Ulbrich [25:44]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey guys, welcome to this week’s episode of the YFP Podcast. I gotta admit, I’m pumped up for this one, I’m going to be talking through five wealth building strategies that you should employ in your own financial plan. No theory, no textbook stuff here. These are all strategies, all five of them, that Jess and I have tested, refined and used in our own financial plan. Now, before I get into these five wealth building strategies, I have two goals for this episode that I want to share with you. First, my hope and desire is to motivate and inspire you to take action. It is so easy to become overwhelmed, and fall into that paralysis analysis when it comes to the financial plan. So for those of you that are listening, that are feeling overwhelmed, or anxious, or frustrated, maybe stuck, or just this lingering, nagging feeling that there’s something more that could be done, I want to be a source of inspiration through sharing my own journey, and encouraging you on your journey as well. Now, that doesn’t mean it’s going to be easy. That doesn’t mean that you’re not going to have some mistakes and roadblocks along the way, there certainly will be. My second goal is to give you specific strategies that you can implement, starting today in your own plan; to take the motivation and to then take action that can yield results as you take steps in applying this to your own situation. 

Tim Ulbrich  01:25

Okay, let’s jump in. I’m going to start with my own story that really begins back in 2009. 2009. So at this point in time, I had just finished my PGY one residency, I was making a whopping $31,000. At the time, thankfully, residents make a little bit more these days. And I finally had reached the other side, right? Ready to cash in on the mystical, six figure pharmacist income that I often thought about during pharmacy school. Now, everything was looking good. Until I realized that I overlooked one very important minor detail. And that was that I was broke. No not broke, broke, but definitely high earner high income broke. My wife Jess and I were in spectacular shape on the surface. But underneath our lifestyle and this new six figure income, really our finances underneath that had a different story, we had over $200,000 of student loan debt that was almost all my student loan debt. Actually, the vast majority of that $185,000 or so was my student loan debt. We had a house at this point with almost no equity. We had very little in savings. And we soon had a growing family to support today we’ve got four boys, our oldest was born in 2011. So there was a lot of things that were going on and happening financially, perhaps some of you can relate to that. And I had realized that despite the amazing opportunities that graduating with the pharmacy degree had offered, there was a little discussed truth among practitioners in the field. And that is that most pharmacists make a good income, but find themselves in exactly the same boat that I’m describing, right. Earning a good income, significant student loan debt and feeling like, hey, there should be more here, they shouldn’t feel as stressed and overwhelmed as I do with my financial situation. Now, as I reflect on that journey, I am certainly grateful for the experiences I’ve had, and for what I have learned along the way. I also feel though, the fear and anxiety coming up when acknowledging that my perception of the six figure income and the reality of what it could be, were two very different things. Now it took me four humbling years, hopefully it won’t take you as long but it took me four humbling years to realize that this six figure income wasn’t all that it was cracked up to be. Now one book in particular, if you’ve listened to the podcast before, you’ve heard me talk about this book, but one book at this point in time 2012, 2013 hit me at the perfect moment. It was a wake up call that I needed. And that book was The Millionaire Next Door by Dr. Tom Stanley. We’ll link to that in the show notes. And that book taught me a very important lesson. And that lesson being that net worth, not income, net worth is a much better indicator of your financial health. Now more to come on this here and a little bit but understand for the time being that net worth is your assets what you own, minus your liabilities what you owe, and it paints a nice picture of what did or didn’t happen with your income, right, that’s earned. And after reading this book, I decided that it was time to put pen to paper and do our own calculation. Now when I did this, the assets column, right, on the left hand side of the paper, I had the liabilities on the right hand side of the paper and the left side was pretty blank. Didn’t have a whole lot of assets at that point a little bit in a 401K,little bit in an IRA, we had some value in the home that that was offset by the liability. But the right side the liabilities, what we owed, there was a laundry list of things that are highlighted by none other than that couple $100,000 of student loan debt that I mentioned, most of which was at a fixed interest rate of 6.8%. A number I will never forget. I know many of you are perhaps facing a similar situation. Now this calculation, this net worth calculation at the time, showed that just four years after graduating from pharmacy school, finishing up my residency, had earned about a half a million dollars of income. But I had a net worth, again, assets minus liabilities of negative $225,000. Ouch, right? Ouch. I was overwhelmed with student loan debt. I was confused about how to best save and invest for the future, I was frustrated by the fact that, hey, we’re making a good income. But we’re not progressing financially as quickly as we should be, or at least as I thought we should be. So if you are like most pharmacists that I talked with, perhaps your journey may include something similar. You might even be there right now, some of you have gone down this journey before or perhaps for students listening. It’s something that you’re thinking about in the future. And, you know, as I think about this, it wouldn’t be so frustrating if you didn’t do everything that perhaps you were told was the right quote, “right thing to do.” Right, you got the degree, you landed the high paying job, you started making some of those smart decisions, some of you have already purchased a home, you’ve been investing, maybe you got that reliable car, and you’re finally reaping the benefits of all that hard work. But it takes a lot more intention, time and effort to translate that income, to making sure that we’re actually progressing in our financial plan and finding the ever so important balance between saving for the future, taking care of our future selves, living a rich life today and investing in those things that are most meaningful to us.

Now, thankfully, for our story, there’s a happy ending. Three years after that point where we realize, hey, we’re making a good income, but the net worth is negative, it’s not showing, we decided through that time period to really get serious, to stop messing around, to take control of our financial future. And in the fall of 2015, we hit submit on the very last payment of that $200,000 of student loan debt. I still have the screenshot saved at the time. Navient was the loan servicer, it’s an image I’ll never forget. Now to get there. We had to sever self teach ourselves personal finance. This was what led to me starting the Your Financial Pharmacist Community shortly thereafter, in 2015. And we made several mistakes along the way. And I’m going to talk about some of those here in just a little bit. Now, at the time, no one in our sphere no one in our community is really talking about this. And it was hard. It was hard, but it was worth it. Now, a little bit more on this story, when we hit submit on that last student loan payment is the fall of 2015, it sure felt like we had arrived financially finally, right? That would be the first however, of many times that we would learn a very important lesson that there is no such thing as arrived. When it comes to the financial plan, there is always an opportunity to grow and learn. Once we had crossed the line from a negative net worth to zero, and eventually working towards positive, it was go time it was time to play offense. Right. Finally, we could begin to play offense with a financial plan. And through methodical savings, investing, diligent spending, planning, and working our butt off building a business, we would eventually cross a net worth of $1 million in 2020. That’s right, negative 225,000 in 2012, to a net worth north of 1 million and approximately eight years. And I want pharmacists like yourself to be fully armed and empowered with the knowledge and tools needed, again, to find that balance between living a rich life today. And tomorrow, you can get there. But in addition to your income, it’s going to require that you have the right mindset, some strategy, and you have habits and behaviors in place that will help you to achieve success, it can be done. And that’s why I’m excited to share some of these strategies with you. It’s not complicated or overly complicated. It doesn’t have to include fancy spreadsheets and nuance investment vehicles. It doesn’t take an exorbitant amount of time. And it doesn’t mean that you have to live on rice and beans. I did it and you can do it too.

Tim Ulbrich  09:56

I recently had the chance to talk with a group of pharmacists and I asked them to reflect on a question that was intended to help them clarify what matters most to them in their lives and how their financial plan can support those different areas. And here are just a few of the responses that I received. From that group of pharmacists, quote, “I would love to travel the world give generously, and fund my kids hopes.” Another was, “to take my kids to see the world.” Another,  “to have a home in space and time to host family and friends often.” Another, “to volunteer locally, spend time with family and learn new skills.” Another,  “To open my new business.” “Working part time without the fear of finances would allow me to volunteer more and do something more passionate about.” Another: “To create a community center for people who use drugs to help provide basic social needs and treatment.” Yes, yes. And yes. Notice what you don’t hear here. You don’t hear people talking about having a pristine, zero based budget. Yes, I think that’s important to help us execute, but that’s not what people are talking about. You don’t hear people talking about having a certain amount of money in the bank. You don’t hear people talking about having a complicated time intensive investment strategy. You don’t hear people talking about their 4.6% high yield savings account and how advantageous that is over another one that’s only 4%. You don’t hear any comments about how to optimize public service loan forgiveness or other student loan strategies. And while there’s nothing wrong with those things, right, I myself like a good budget, like a good student loan repayment strategy, things we talked about often in the show, it’s important to remember that these things aren’t the end goals and determinants of success, but rather steps that are along the way to support again, living that rich life today and tomorrow. So before I get into these five strategies, and before you go all Type A pharmacist on me and start making moves, hitting and checking things off that list, I want you to take a step back and ask yourself a few questions. What am I trying to accomplish? What’s the purpose? What does success look like? Right? After all, money is a tool for living a rich life. And it’s up to you to decide what that rich life looks like. Okay, so let’s jump into these five wealth building strategies, it’s time to take action. Again, none of that fluffy and practical stuff. I’ve implemented all of these in my financial plan. Step number one, you probably saw it was coming based on my discussion of net worth. Step number one is you have to be tracking your net worth. As I mentioned, and that book, The Millionaire Next Door, one of the quotes from that book from the author Tom Stanley is, quote, “one of the reasons that millionaires are economically successful is that they think differently.” And what he’s referring to is that those who build wealth realize that income is not the metric of success, but rather a tool for building wealth, right, and it’s worth repeating the calculation we talked about before, net worth what you own, minus what you owe, so your assets minus your liability. Net worth not income. But net worth is the true indicator of your financial health. And if you understand and respect this calculation, it will propel your financial plan. Discovering net worth was a mindset shift and a pivot point in our own financial planning journey. Now for Jess and I, we update a net worth tracking sheet once per month, which allows us to take a step back and see the overall trajectory and bigger picture, while also focusing on the short term goals. And I have this tracking sheet along with several other resources. I’ll reference throughout the podcast available in a Google Drive, a toolbox. We’ll link to that in the show notes. You can go to that toolbox to access those for free, you can make a copy, edit, customize, make it your own, and be able to implement it in your own financial situation. It’s a very simple spreadsheet. Again, nothing fancy, right, we have a list of all of our assets, all of our liabilities. So this includes things like our emergency funds, various business accounts, kids 529 accounts, all our retirement accounts, different real estate that we own, and so forth. All assets, all liabilities, once a month. This is the big view picture of are we tracking, are we trending in the right direction. So that’s wealth building strategy number one.

Number two, you’ve heard me talk about this on the show before is setting up savings buckets. I love savings buckets. All about intentionality. Once Jess and I are on the same page with our financial goals for a given year, it’s then time to write them down and prioritize them accordingly so that we can start to implement a plan to achieve them, right? Otherwise, it’s a hope, a wish or a dream. So for each goal that we have for the year, we defined several things. First, the amount that is needed to achieve that goal. So for example, if we were to say, hey, we want to refinish the basement, it’s a goal we’re working on here in 2024, we got to put a budget to that we gotta put a number to it. And we got to put eventually a timeline to it. So first, we have to have an amount needed to achieve the goal. Second, is we have to identify the current amount we have saved towards a goal, sometimes that’s a zero. Sometimes that might be a portion of the goal. The third thing is then the gap between the amount needed and the amount saved. Right? This is common sense stuff. And the fourth thing is the monthly contribution needed to close the gap. That’s the key. So we have to know where we’re going, how much do we need? When do we need it? What do we already have saved? What’s the gap? What’s the timeline difference and a monthly contribution that’s going to help us get there because then we can implement that, right, we can do something with that, to be able to put ourselves on track to achieve it. Now, I mentioned the tool box before, there’s another resource in there. I have our savings buckets spreadsheet that you can again, nothing complicated, you can download it, you’ll see it’s just a sheet that outlines different priorities, what the status is, what the goal is, what’s the current funding? What’s the amount, what’s the gap, and what’s the contribution needed to get there with some notes for each of those items as well. So once we have this from here, once we have a prioritized list of our goals, we can then work the budget, or the spending plan, whatever you want to call it to determine how much is available each month to allocate towards the goals and make any necessary adjustments. Now just to give you some context of things that we’re thinking about here, right, this would be items like home improvements, saving and retirement accounts, putting money away into an HSA saving for vacations, saving for a future car purchase, right? These are the types of goals and things that we’re working on. And once we have this prioritized list, and we can begin to weave it into the monthly spending plan, based on hey, we know what you’re gonna make, we know the fixed expenses, the discretionary expenses, we know what’s leftover, then we can allocate whatever is projected to be left over towards the goals we’ve already defined in advance. And this is where the buckets come in. Because once we do this work, we can set up savings buckets. Now we use Ally Online Bank, this is not commercial for Ally, you can do this with many other banks, or you can track it on your own, to have a bucket for each goal. Except for those things that go directly to outside accounts. Right. So I don’t want things like IRA savings, HSAs, 529s to be sitting around in a high yield savings account. But I want those to go to work as quickly as possible for us. But for everything else, right. I mentioned several of these: vacation, home improvement projects, saving for educational expenses, not for future like 529. But for us, that would be homeschool expenses and things that we know are coming throughout the year could be gifts, insurance payments. I said vacations, vehicles, etc. emergency fund savings, right. So when I log on to our Ally online savings accounts, I see all these buckets, which are really just virtual buckets within a high yield savings account that we can then identify and earmark. It’s so important that if we think we’re saving for something, let’s actually do the accounting for it and create the bucket that allows us to see the progress made. This can sound complicated, don’t let it fool you. It’s not complicated. This system took us about 15 to 20 minutes set up. Once we had already done the work right, which is the hard work is talking about the goals and prioritizing the goals. So that’s number two, setting up the bucket system. 

Tim Ulbrich  18:51

Number three in our list of five wealth building strategies, is creating a legacy folder again, something I have talked about in the podcast before. And while a legacy folder isn’t going to directly move the needle on your net worth, don’t underestimate what it can offer in terms of peace of mind. And knowing that in the event in an emergency, all your financial documents are organized and in one location. So think of the legacy folder as a one stop shop where you have all of your important financial information, records and systems such that if someone else had access, needed access in the event of emergency, something happened to you, they could quickly pick up where you left off. So our legacy folder is a combination of a shared Google Drive folder, and a fireproof safe at home. Right. So I think about things like passports, birth certificates, etc. copy of estate planning documents, those are going to be inside of a safe, and then we’ve got other things that are on a shared Google Drive. So our financial planning team at YFP has shared access to the Google Drive as well as family who would be caring for our boys in the event that something happened to us, and then we use One Password as a tool to share and store all of our passwords. You can access again in the toolbox resource I mentioned already, we’ll link to that show notes: YourFinancialPharmacist.com/toolbox, I have a legacy folder table of contents that we use that you can download, make a copy, modify and make it your own. 

Tim Ulbrich  20:25

Alright, number four on our list of five, upping your financial IQ. So here are just some of the questions I’ve received recently, from pharmacists in our community: how much should I save for retirement? How can I best save and invest for the future? What should my asset allocation be? Do I need a life or disability insurance policy? How can I optimize student loan or other debt payments?  Should I save and invest or pay down debt instead? If any of these sound familiar, this is real life stuff. And know that you aren’t alone if several of these questions are swirling around in your mind as well. And as I reflect on my own journey, I realized that knowledge, along with community and accountability, was a key missing ingredient early on. You know, despite being a personal finance nerd today, my financial IQ early in my pharmacy career was very limited. When I was just finishing up my pharmacy school training in 2008, residency 2009. At the time, I could not tell you the difference between a 401K and an IRA a stock versus a bond secured versus unsecured debt, unsubsidized versus subsidized loans, a tax credit versus a deduction, right, the list goes on and on. And my ignorance, my lack of financial IQ led to mistakes and really led to a delay in our progress. But that really wasn’t my fault as I reflect on the journey. Now, taking responsibility of that and learning those things. Certainly, there’s an opportunity there. But know that for many of us, we just don’t have that background. Right, that strong fine foundation and financial literacy, our K-12 system, to be frank does an atrocious job of prioritizing financial literacy. And while I’m grateful for my AP Calculus class, and how that saved me from having to take a semester of calculus in pharmacy school, I use very little calculus in my life today. But contrast that with personal finance, which I use in some form, or fashion every single day. So why do we invest so little time in financial literacy, knowing that its application will be wide for everyone? That’s a great question, right. And it’s a tragedy, but it’s one that we have to overcome, and we can take responsibility to overcome. And so the good news is that we can make progress here we can up our financial IQ if we’re willing to invest some time and energy and I’m not talking about an AP course level type of time, just a little bit of time invested is going to yield big benefits. I hope you continue to listen to podcasts, attend our webinars, read our newsletters, I think those are great ways that you can stay engaged and increase your financial IQ. 

Tim Ulbrich  23:04

Alright, number five on our list of five wealth building strategies is respect the power of compound interest and time value of money. If you aren’t in awe of that time value of money, you haven’t spent enough time nerding out on a savings calculators. As Albert Einstein is credited with saying compound interest is the eighth wonder of the world. He who understands it earns it, he who doesn’t pays it. This quote should pique our curiosity about the power of investing, more specifically, the power of compound interest in time value of money. It’s one of those financial jargon terms compound interest, time value, money that we throw around, that we know is important, but may not be sure what it exactly means and why it matters. And simply compound interest is the process by which an investment grows exponentially over time, because both the original investment and the interest gain earn interest over time. So we save a little bit today, it grows and then the future growth is the initial savings plus the growth plus the growth plus the growth and we continue that over and over again. And you can use a simple compound interest calculator, we have one available on our website, we’ll link to that in the show notes. Just to see that what would it mean for you when it comes to savings and where you’re at and how much you have saved? And how will that project out into the future? So what we know, which is something we’ve all heard before is that the earlier we save, the less aggressive we have to be in saving, right? And that’s where we really start to see the magic of compound interest and time value of money do its thing. 

Tim Ulbrich  24:44

Alright, so those are five wealth building strategies that I think you can implement in your own financial plan. And it’s it’s your turn now, right and as you start to implement your plan, let me give you two words of encouragement First, avoid analysis paralysis by identifying what the next move the one next move you can make. Remember, this is a marathon, not a sprint, and I just talked about a whole lot of things. And some of you are probably gonna want to this long checklist and start moving things forward. Resist the urge to try to do too much. And eventually getting to a place of frustration where you don’t make much progress at all. What is the one next move that you can make? This is a marathon, not a sprint, one step after another over a long period of time will yield big results. That’s what Darren Hardy is talking about, in his book, The Compound Effect when he says that small, smart choices, plus consistency plus time equals radical difference, small smart choices, plus consistency, plus time equals a radical difference. So that’s the first note of encouragement. The second one is your journey will inevitably include mistakes, trust me, I’ve made my fair share. Here are just a few I’ve paid too much student loan debt, because I didn’t understand the different options that were available such as loan forgiveness and refinancing. Second, I bought a home to be frank by just a little bit too early, without having enough equity in that home and a renting situation would have been fine for a little bit longer. Third, delaying the purchase of term life insurance with young children. Fourth, delaying the establishment of estate planning documents. Fifth, cashing out a small but still a pre tax retirement fund. And finally buying a car that at the time, we really had no interest in buying. So since mistakes will happen, right? It’s part of the journey, we must learn to give ourselves some grace. You’ve got this, I’m cheering you on. And I hope that you will continue to engage with our community as you go through your own journey. If you have a question that you have, in the moment, a roadblock that you’re facing, a win that you want to share, just an ear to listen of something that’s frustrating you in the moment, send us an email. I would love to hear from you [email protected]. And for those of you that are listening, saying hey, I really could use some help one on one, and really moving the financial plan forward to take all these different priorities no matter where you are in your journey, whether that’s a mid career pharmacist like myself, someone who’s approaching retirement, someone who’s a little bit early in their career, we’d love to have the opportunity to talk with you further. To learn more about our fee only financial planning and tax planning services and to determine whether or not they’re a good fit. You can book a free discovery call by going to yourfinancialpharmacist.com you’ll see a link to do so there to learn more about the services and to again, see whether or not that’s a good fit for your own financial plan. Thanks so much for listening. As always, I hope you found this episode helpful. And we’ll catch you again next week. Take care. 

Tim Ulbrich  27:51

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 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 370: Your Retirement Questions Answered with Tim Baker, CFP


Tim Baker, CFP and YFP Director of Planning answers questions from the YFP community on saving and preparing for retirement. This episode is brought to you by First Horizon.

Episode Summary

Planning and preparing for retirement can feel overwhelming. In this episode, Tim Baker, CFP®, RICP®, RLP®, makes the steps to planning for retirement more manageable. He answers three questions from the YFP community on retirement planning, including:

  • How to determine the optimal amount to save for retirement
  • Strategies for dealing with market downturns during retirement
  • How different investment options impact retirement savings

This episode is brought to you by First Horizon.

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

  • Retirement planning, investment options, and home loans for pharmacists. [0:00]
  • Retirement planning, including determining optimal savings amount and factors to consider. [2:24]
  • Retirement planning, nest egg calculation, and potential deficits. [5:51]
  • Retirement planning, including nest egg calculation and goal setting. [12:46]
  • Strategies for dealing with market downturns during retirement. [19:33]
  • Managing investment risk through asset allocation and flexibility. [24:25]
  • Retirement planning, investment options, and their impact on savings. [28:42]
  • Traditional portfolio allocation and retirement savings with emphasis on asset allocation and tax considerations. [32:49]
  • Retirement planning for pharmacists, including asset allocation and tax strategies. [37:30]

Episode Highlights

“I think the big thing is how do you define optimal [savings for retirement]? And then the factors are so important. What type of lifestyle do you want? I think what most people want is to live a similar lifestyle to what they’re living as they’re working. So they don’t necessarily want to be more lavish. But they don’t necessarily want to give up things either.” – Tim Baker [4:27]

“The nest egg calculation, to me, that’s the best way to make that big number, the kind of unknown, a little bit more digestible.” – Tim Baker [9:37]

“I think a lot of people think that they have control over when they’ll retire and they don’t. There’s a stat that says 40% of people don’t work to their expected retirement age, either because of health issues, or they were eliminated from a job, etc.” -Tim Baker [11:12]

“I think the best time to plan for retirement is now and the sooner you can kind of look at where you’re at and be able to adjust where you need to go, the better.” – Tim Baker [11:44]

“When you talk about the nest egg calculation, that is where the value really lies. The short answer of how do you determine the amount of savings needed for retirement? Nest egg calculation, three words.” – Tim Ulbrich [13:39]

“So, you know, and again, the most successful retirees are the ones that are most flexible.” – Tim Baker [25:45]

“It’s being in the right asset allocation. It’s keeping your expenses low. And being consistent with that structure. I think we’ll get people through any of the seasons that you’ll see over the course of an investing career.” – Tim Baker [28:28]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week we take questions from the YFP community on retirement planning, we discuss how to determine the optimal amount to save for retirement strategies for dealing with market downturns during retirement, and how different investment options such as stocks, bonds, and real estate can impact your retirement savings. Let’s hear from today’s sponsor First Horizon and then we’ll jump into the show.

Tim Ulbrich  00:31

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 with First Horizon who offers a professional home loan option AKA a doctor or pharmacist loan that requires a 3% downpayment for 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 pharmacist home loan is available in all states except Alaska and Hawaii, and can be used to purchase condos as well, however, rates may be higher and a condo review has to be completed. While I’ve personally worked with First Horizon before and had a great experience with Tony and his team, don’t just take it from me. Here’s what Payton from Tyler, Texas had to say about his experience with First Horizon: “Aaron, Cindy, and Marilyn were very easy to work with. As a first time homebuyer, I shopped around for lenders at the onset of the process, Aaron was always very quick to reply and provide me with any details I requested in order to move forward and my decision to select a lender. Once I selected First Horizon, Marilyn and Cindy did a great job of keeping my wife and I informed of the process. Closing was a breeze yesterday at the title office. And I sincerely appreciate the team going above and beyond to keep my interest rate locked despite extending closing due to negotiations with the seller. I’ve already shared my positive experience with many pharmacists on the groups. And I look forward my brother, also a pharmacist, refinancing with you guys when he decides to.” So to check out the requirements for First Horizon’s pharmacists home loan and to start the pre-approval process, visit yourfinancialpharmacist.com/home-loan again, that’s yourfinancialpharmacist.com/home-loan. 

Tim Ulbrich  02:24

Tim Baker Good to have you back on the show.

Tim Baker  02:27

Good to be back. Tim, how’s it going?

Tim Ulbrich  02:29

It’s going well. I’m looking forward to this episode. We’re gonna be talking about retirement planning – a topic that we’re seeing a ton of interest in getting lots of questions about. You did a webinar recently around retirement planning. Lots of engagement that came from that. So we want to answer some of the most common questions we’re getting from the YFP community around retirement planning. And we’re gonna go through four different questions around how do we determine how much is enough? What are some of the strategies to deal with market downturns while you’re in retirement, I know something that you’ve talked about before of that important window before leading up to an after? And how we think about the investment strategies. We’ll talk about some of the different investment options that can impact retirement savings, and then we’ll wrap up by talking about some of the health care costs in retirement. So let’s start with the first question, Tim, which is how do you determine the optimal amount saving needed for retirement? And really, what are the factors that should be considered when setting what this number is what the goal is?

Tim Baker  03:24

Yeah, so huge question, Tim. I think, you know, I’m going to answer the question with with a question is, like, define optimal? Yeah. Right. So like, optimal? Well, we’ve talked about, you know, is, you know, should die with zero be the goal. And, you know, what am I mean by that is, there are a lot of people that, you know, they’ll save, save and save, and maybe the goal is to pass on some, you know, money to their heirs. You know, I always I think I’ve said it said this on the podcast before my parents have said to me, like, hey, we want to make sure that like when we die, like we we give, we give you and your siblings some money, and I’m like, I don’t expect that I don’t really need that. I’m not really banking on that at all. And maybe when I’m older, I would want the same thing for my you know, for my kids, but the die was zero concept is it’s kind of like, you know, you can’t take it with you type of thing. So you’re you’re kind of spending on your portfolio, you’re giving it away, etc, etc. And maybe there’s some, you know, maybe there’s some somewhere in between where you don’t want to be right on the on the needle there. You don’t want to be with zero. So you maybe you have a little bit more cushion. So, you know, I think I think that would be the big thing is like how do you define optimal? And then the factors I think are so important. So like, what type of lifestyle do you want? I think in a vacuum, what most people I think want is to kind of live a similar right lifestyle than what they’re living as they’re as they’re working. So they don’t necessarily want to be more lavish. They don’t necessarily want to give up things either. Unfortunately, some people have to give up things just because of you know, poor planning or they have to work longer. So you know, what, where do you want to live? What’s the geography? What’s your housing situation, that’s going to be the biggest fixed expense. The biggest expense in retirement typically is housing. You know, what are your hobbies? Activities? Are you taking care of grandkids? Are you? Are you jet setting? Are you working? Are you not working? Are you volunteering? Consulting? What does that look like? And, you know, I think from there is, you know, estimating, you know what your retirement expenses would look like? So I mentioned like, what are the fixed expenses? What are the variable expenses, which could be big trips, maybe you’re paying for kids’ weddings, maybe it’s a medical expense. And really kind of zeroing in on that. Unfortunately, Tim the B word doesn’t ever go away. Right. So understanding what your budget looks like, is, is I think an integral part of of retirement planning. There are there are rules of things and way that you can slice it, there’s some planners that will look at the tax return, and then assume like, whatever’s on last year’s tax return is what I need for this coming year. And that’s kind of a very top down approach. A bottom up approaches a budget, you can use, use a rule of thumb, like a replacement ratio. So hey, if I make $100,000 and 70, or 80% replacement ratio means that I need $70-$80,000, you know, in that in that year of retirement. Looking at accounting for inflation, so do you think inflation is going to go up? It’s going to go back down to kind of the 3% levels? The big question is, is like what’s the retirement duration? Nobody knows that, right? So, you know, some people are like, Oh, I’m gonna, you know, retire at 65. And I, maybe I have a good five or 10 years on me, most people, you know, live longer when they want, they think they’re gonna retire. And that’s probably the trickiest part about all this, unlike, you know, other types of planning that are similar to this, like education planning, we kind of know that, hey, our goal was to kind of get through four years, maybe eight years of, you know, education. Here, it could be five years, it could be 45 years. We just don’t know. And that’s kind of the the major wildcard, but then understanding like, what are your sources of retirement? Is it social security? Is it a pension? Is it a, is it an annuity that you buy? Is it your traditional portfolio? Is there other types of you know, is it real estate income, whether your cash flow in real estate, or it’s a liquidation event? Are you selling a business? Is there a part time work there? So I think all of these play into play a part in it, and then I kind of how you distribute the cash also plays and how you handle taxes. So from a distribution perspective, you know, are you looking at, you know, what we’ve talked about in the past, which is a floor and strategy, which is very conservative strategy. Is it a bucket? You know, where, you know, in this, this will be, you know, another question that we have, it’s like, how do we account for like volatility or, you know, in the market? You know, is it a bucket strategy? Or is it the systemic withdrawal strategy, where it’s, Hey, we’re distributing 4%, no matter what, or we’re being flexible, depending on what interest rates what the markets doing? So lots of different lots of different ways to kind of, you know, go about this, but I think defining like, what optimal is for you is going to be important. And again, that’s why a lot of people are like, I just want to, you know, die with zero, that plays.I think the best place to start in terms of the optimal amount of savings needed for retirement to answer that question is, I think starting with a nest egg calculation is the best the best way. It is the, it is the best way, in my estimation, to deconstruct a problem and problem is not the right word, but a scenario that is years in the future, that’s a big freakin number. So, and when I was talking about this, like when we would do retirement planning at my past firm, you’d be the client and we would say, Okay, now now’s the time to talk about your retirement. Based on our time value of money calculation, you need $3.65 million to retire. Alright, let’s talk about your insurance, onto the next thing. And we could see kind of like, maybe the color come out of your face, maybe that little glossy, you know, glassy eyed look, and just, it didn’t connect with people. So, you know, it got me thinking, how can I make this number impactful to you today in 2024? So a nest egg calculation, which says, Okay, this is the number $3.65 million, but then what does that mean to me today? And we compare it to what’s currently in your retirement portfolio? What’s your contribution rate? How was it allocated? And then how does it compare, you know, to what you potentially need. So where are we running a deficit, meaning we’re behind on that $3.65 million? Or are we ahead meaning that we’re, you know, we’re overfunded? So to me, that’s, that’s the starting place. And again, it’s not a perfect, it’s not a perfect calculation, there’s a lot of assumptions in there in terms of investment returns and inflation and actually, when you’re going to retire and when you’re potentially going to die, we’re estimating all that which you would do anyway, in any type of, you know, scenario analysis. But to me, that’s the best way I think, to make that big number that kind of unknown, a little bit more digestible. There’s other ways that you can look at it, where there’s Monte Carlo analysis where you’re looking at, you know, a randomize portfolio return or other things that are related to you know, economic variables that you can say, hey, we’re going to run 1000s of scenarios and what it shows you is, hey, you’re a 85% chance of success. And that one chance of success means is that there are assets left, at the end of the plan, whether you set that for age 90, 95, 100, or whatever that is, that kind of is the next level. The rule of thumb is, you know, what people have heard of is a 4% rule. So, you know, if you’re, if you’re looking at your optimal savings plan, and you have $500,000, in retirement, if you use 4%, that means you have $20,000, over a 25-30 year return. So you might say, Hey, that’s not enough. I need more. So obviously, the right way to reverse engineer that, Tim, is to say, Okay, what do you need, if it’s 40,000, use a 25x, ROI, you need a million dollars, and that’s just a 4% rule inverted. So to me in terms of practical things that I wish I would have a listener, you know, it’s like, okay, are you getting the match, get to that race to the 10%. So your employee contribution, again, this is a vacuum. You know, I’ve talked with prospective clients that had lots of credit card debt, and other things that are going on, I wouldn’t necessarily prescribe this for them, but you know, get to the 10% employee contribution, then eventually, you know, get to a phase where you’re maxing out, and then use IRAs or brokerage accounts to kind of supplement along the way as you can. So, but remember that this is a problem set, Tim, that I think a lot of people think that they have control over that they that they don’t. You know, there’s a there’s a stat that says 40% of people don’t work to their expected retirement age, either because of health issues, or they were eliminated from a job, etc. You know, those types of things, I think where in my mind, I’m like, probably work till I’m 70 and Shay is 65. But, you know, I could lose my marbles was between, you know, before that, like, who knows? So, you know, I think I think, the best time again, I’m a planner, so I’m biased, but I think the best time to plan is now and the sooner you can kind of look at where you’re at and kind of be able to adjust where you need to go, the better. You know, one of the things that I would always kind of lament working with at my last firm was that we only worked with like pre retirees and retirees. So people would come off the street, and they’d say, Hey, I’m 55 years old, I’d like to retire in the next five years, I have $50,000, to my name, I have credit card debt, but like, it was almost like doesn’t, it doesn’t add up the math is not mathing. And so those are yeah, those are all the kinds of things that go into this. And it’s, it’s a huge thing to kind of deconstruct but I think, you know, looking at this as in a vacuum is not necessary ideal. You want to look at all the different parts. We talked about this with our own plans, and kind of, you know, where we’re trending and things like, you know, but it’s, it’s a big question, I think, and there’s just a lot of ways that kind of, you know, look at it. Yeah,

Tim Ulbrich  12:46

The thoughts that are coming to mind, as you’re talking, Tim, is I think there’s risk here to oversimplify this and be overconfident in this. And what I mean by the over over simplification is like, you can run numbers in a calculator. But if you’re not having some of the important discussions and questions of the inputs into that calculator, then we’re not doing the work that needs to be done, right. You mentioned like what what do we mean by optimal? Like, what does that actually look like? What does it mean to be living a wealthy life and retirement? As you mentioned, some huge variables of are we working at all? Are we working part time? You know, is this 55? Is this 64? You know, might we be caring for elderly parents? What does travel look like? What are all these things? And then, you know, when we think about even that word, retirement, I think can carry meaning that you and I might look at that word and say it means two very different things, right. And so, you know, when you talk about the nest egg calculation, to me that that is where the value really lies, to me the short answer of how do you determine the amount of savings needed for retirement? Nest egg calculation, three words. But to do the nest egg calculation and put in all the inputs and variables, which again, as you mentioned, are assumptions and things might change and move. And there are things that we think we have control over that we don’t, but it’s the closest we can get, and we can modify or update that look at it over time. In order to put the numbers in the calculator, we got to have some really good conversations. And this, to me is really where the planning comes to base, we’re not just trying to shove money away into accounts that were, you know, like, somebody said, I should put money in a 401 K, or an IRA or an HSA or whatever. Or we’re looking at these big scary numbers in the future thinking, Am I ever gonna get there? Looking at the individual variables, having the discussion and the conversations, answering those questions, plugging those in. And then as you mentioned, bringing it back to today. So important. Especially for the people that you know, for someone who’s two, three years out from retirement, that may not be as critical as for someone who’s in the middle of their career, or even in the front half of their career where, you know, we got to come up with a number that I can actually put my arms around and do something with today because otherwise I’m gonna look at this number 30 years in the future 20 or 40 years in the future and say, the math just doesn’t even seem possible.

Tim Baker  14:58

Yeah, in one of the things that when we go through the Script Your Plan, which is our second second meeting, and the way that we kind of start building a financial plan, we go through what’s called a Get Organized meeting, which is we bring up the client portal. And we’re basically trying to get to like a clean snapshot of what the balance sheet looks like. So the assets, the things that you own, minus the liabilities, the things that you owe equals your net worth. And our job is to hope, you know, the idea is to kind of grow that quantifably to get your, you know, your net worth grow over time. The second piece of that is Script Your Plan, which is all about like goal setting, right? So it’s like, Okay, now that we know where we’re at, where are we going? And with those two things in place, that that answer of it depends that I always give, Tim transforms into this is given your balance sheet, given your goals, Tim, this is what I think you should do. So it’s no more It depends. Because like, we know, you, we know what your goals are, we know what your passion is, this is what your goals are. But part of that Script Your Plan exercise, when we would kind of talk about a timeline, you know, we I would ask the question of, hey, like, it’s July 2024, let’s fast forward a year, what is success? And you know, what does success look like? And then we go three years, five years, 10 years, 30 years. The further you get out, you know, the further away that you go, the harder it is for you to kind of imagine that self. So with retirement planning, you know, the way that you know, with the way that I would do this, it’s like, I kind of, you know, I would say, hey, let’s get into the DeLorean. Let’s go 88 miles per hour, rev it up, we get out in, let’s see, 2054. So it’s 30 years from now, what does success look like? And for a lot of people, it’s like, I don’t know. So I’m like, okay, like, how much? How would your dad, you know, if I’m, if I’m 40. My dad’s like, imagine yourself, as your dad, like, pitch yourself, as a seventy year old, what does success look like? So it’s just like, the next day where we’re trying to, like, equate the numbers in from a from a Script Your Plan from a lifestyle perspective is, the further that gets out, the harder it is for us to kind of relate to our 10 year older self,  20 year older self, 30 year older self. So if there is a group or a person that you know, very closely that you can say, okay, like, if I’m in their shoes, and you probably do that, anyway, I’m like, oh, like, when I’m retired, I’m not going to do what my parents are gonna are doing, or I am going to do what my parents would do. So you can kind of like, take that, but even 10 years out, Tim, if you look 10 years back, from, you know, if you look back to 2014, how much of your life has changed over those 10 years,. You know, like, like, things like time flies, but, you know, to me, it’s like, you look at, you know, time is so hard for us, as humans can conceptualize. And it’s no different in in something like this. So I think it’s like, really kind of going through those, like thought experiments and, you know, kind of assessing, because I think so much of this is really about the numbers. But when you deconstruct this, it’s really not. You know, I think, you know, if you’re working with a financial planner, again, shameless plug, I think the numbers are going to be fine. Especially if you have enough time, you know, the longer that you’re engaged with, with a plan, the more success, you know, you know, whatever version of success. It’s the people that don’t, I think is where you kind of run into problems. But to me, it’s really important to kind of deconstruct like, the answer that question is what is optimal, and then plan around that, you know, the nice thing about, you know, having decades so to speak in a financial planner, is that the micro things that you do today really steer that frigget to where you can have success, you know, in the long run, so. But it’s an interesting, you know, it’s an interesting problem set, because it is a huge number. And it’s far in the future for a lot of people, it just, it doesn’t seem real, you know, I have a lot of people that, you know, will work with us in their 20s and 30s. Like, I’ll never be able to retire. And when we show them how, you know, the math to get to that, like, I think that’s transformative. Now, I think the second piece of that is like, okay, like, what is a happy retirement? What’s a successful retirement and I think people are starting to figure that out, but it’s not necessarily a destination, right? It’s just the next chapter. And, you know, especially with sometimes pharmacists, or like highly, you know, people that are higher achievers, you know, their role and identity gets really tied up together. And it’s like, okay, if you step away from your career as a pharmacist, like, who are you? What do you do? Like you know, and that and that for some people can be really difficult to kind of again, unbolt.

Tim Ulbrich  15:42

Tim, one thing I want to say and separate topic for another day that we can dive deeper into, we’ve talked about in the show before, but when you talk about time, being hard to really, you know, wrap our mind around, especially for folks that are early in their career, you know, your 2014 examples, a really good one when I think back to 2014, like it’s a distant memory and and it feels like Yeah, we were doing some savings and things now, but if it weren’t for things like automation, you could see how a 10 year period slips by you without having the intention out. This is why we believe so firmly in automation is an important part of plan. Yes, we got to do the hard work up front. Yes, we got to check in periodically. But once we start to kind of remove ourselves from that equation, and we do that hard work, and then we turn it on, whether it’s automatic contributions, it could be automatic savings buckets or other things, that’s where we’re gonna start to really see the progress and prevent this scenario where we say, How did those 10 years go by? And I didn’t make much progress on my retirement planning?

Tim Baker  19:32

Yeah. Yeah, I think it’s so important, because we just get into this, like, autopilot and you wake up. It’s like, where did that? Where did it go? 

Tim Ulbrich  19:56

Yeah. Alright, second question we have is, what are some strategies for dealing with market downturns during retirement? If we even zoom this out a little bit more? I’m guessing this person might be asking, you know, given the volatility, certainly the markets had a good run lately, but it’s been pretty volatile, right, you know, over the last couple of years. So for those that are, you know, in what you call that eye of the storm, around retirement, or coming up on, just got to retirement, or maybe they’ve been in retirement for a period of time? How do we address and deal with some of the market volatility?

Tim Baker  21:11

Yeah, so this is market risks, and you really don’t have any control over at all outside of like, taking all your money out, you know, take your investment ball home, and, you know, and go home, right? So like, this is where people get scared, they’ll go to cash, and they typically are selling low, but then they like, oh, the markets good now, and, you know, dip my toe back in, and they’re buying high. So you know, what you’re talking about a sequence risk where is where it’s basically, you know, when the timing of your retirement, and the distribution of your retirement accounts, matters a lot. Probably more so than most of the other investment or the retirement risks that are there. So to kind of zoom out of this first, Tim, this question is, you know, what are some so the question is, what are some strategies for dealing with market downturns during retirement. So what we’re assuming here is that you are no longer in that accumulation phase, you are in the deaccumulation, that withdrawal phase. But I think like the, the, my thoughts is, are consistent no matter where you’re at. You know, to me, the big things that I look at from a retirement portfolio is I want to make sure that you’re in the right allocation, and that you’re driving the expenses down as much as possible related to your portfolio. Now, what I’m taking, typically talking about here is like expense ratio. So the right allocation is probably the optimal, you know, the optimal term in and I think, if you look at the rule of thumb, that I don’t love is the rule of thumb in terms of like, how you should have your portfolio allocated is, you take 110, you subtract your age, and that’s the amount of stocks or equities you should be in your portfolio. So if I’m 40, you take 110, minus 40. And I should be in a 70%, stock portfolio and a and a 30%, bond portfolio, which I think and it’s very much a linear thing. So as you as you age, go, 60/40, 50/50, etc, etc. I think that that’s wrong. I don’t think that that’s a great rule of thumb. I think that, to me, I look at this almost as like a, my, my strategy or my thought process is more like a cliff. So my thought is like, you know, if I’m 40 years old, and I have 30% of my allocation in bonds, I think that’s a mistake. And if we, if we zoom out, you know, if you look at stocks, and again, not all stocks are created equal, but in broad strokes, stocks are typically there’s a higher potential for growth, with a lot more volatility. Bonds or fixed income, there’s less potential for growth, but less volatility. So there’s more of an exponential growth with stocks and more of a linear growth of bonds. So, to me, what you give up during the accumulation phase, if you’re in your 40s, is you give up a lot of the market, the market is still gonna go up, but I equate it to like, if you’re in mostly equities, it’s gonna be kind of Rocky Mountain in terms of ups and downs. If you put bonds and there’s more Appalachian Mountains, there’s a little bit more, you know, you know, there’s less ups less downs, but they’re still they’re still that. So to me, I think that, uh, mostly equity, you know, again, this is not investment advice, but I think like maybe mainly in equities in your accumulation phase. And then when you get to five to ten years before and after your retirement age, that’s when you’re going to, that’s when you’re really going to manage the sequence of return risks that you mentioned. So think of that as like the eye of the storm. So let’s assume that my retirement age is 65. And I’m being as conservative from a timeline perspective, at 55. That’s when I really am going to kind of that’s what that’s the cliff where I’m going to say, Okay, I’m now no longer going to be mostly in equities. That’s where I’m going to be the most conservative and go to bonds. So instead of this glide path, where I’m going from 100% equities to 80, 90, basically, I’m not doing that over a period of years, I’m doing that right when I hit 55, and that’s where I’m going into more of a balanced portfolio, which could be a 60/40, or 50/50. And then over those years in that either storm, so 55, to 75. And the most conservative sense, that’s when you’re gonna be the most conservative in terms of your balanced portfolio. And then when you come out of the eye of the storm, that’s when you start ramping up the equities, again, whether that’s 60/40, 70/30, 80/20, which is very different than kind of the, you know, most people, it’s like, oh, you’re in your 80s, you should be in a 20/80 portfolio or whatever. And a lot of people, it’s, it’s not sustainable. So the the eye of the storm is to kind of get through the sequence of return risk. So, you know, and again, the most successful retirees are the ones that are most flexible. So if you go through like the subprime mortgage crisis, or the.com crisis, and your portfolio goes from a million to 700,000, and then you’re drawing $50,000, you know, for the next couple years, the portfolio and a lot of cases are going to fail. If you were to delay your retirement and wait for the market to recover two years later, it’s completely different scenario. So that to me, is what we’re talking about here. So you know, the strategies for dealing that is, I think the best thing is the being the right allocation is to not do what you’re feeling. So I always talk about do the opposite of how you’re feeling. So if you get scared, a lot of people should go cash and a lot of ways you should be doubling down and investing. Another thing that we’ve talked about in the in the in this forum, Tim, is something like an annuity, which is hard to really wrap people’s minds around, but like if I can peel off $300,000 from my portfolio, to supplement Social Security to say, Okay, come hell or high water, I’m gonna have the steady check between social security in my annuity, regardless of what’s going on. For that, for a lot of people, that’s a peace of mind. So like the the market volatility is not as as big a concern, because I’m like, I don’t I have all my basic necessities, necessities handled. Right. So the mental thing of like an annuity might be might be a big thing. Being flexible, as I mentioned in, it could be a bucketing approach where you’re like, hey, my, my near term bucket, my zero to five year bucket is spoken for me and I have that in cash or tips, I’m good. So I don’t care what the market does, you know, as long as it’s recovered in the next five years for me to kind of replenish that bucket. And this is where we’re basically have a short term and medium term, and then a long term bucket. So short term, zero to five, medium term, six to 15, long term 15 plus, and then those buckets kind of replenish themselves as time goes. If there’s, if we’re in a time where the market crashes, but I still have $100-$200,000 in my cash bucket, I don’t really care, I’m hoping the market will return in that period of time to replenish that cash bucket. And typically, it should. A lot of the most, you know, the Great Depression in the Great Recession, you know, those recover those market recoveries aren’t decades. They are typically, you know, two to six years, two to seven years, that type of thing. So that could be that can be something as well. So, you know, the market, the market does what the market does. And I think those are that are best positioned like they they understand that. It’s not, you know, we’re not trying to like game the market, outside of very few people in the history of the market can can beat the market and kind of, you know, foreshadow what’s going to come. So it’s, it’s being in the right asset allocation. It’s keeping your expenses low. And being consistent with that structure. I think we’ll get people through any of the see any of the seasons that you’ll see over the course of an investing career.

Tim Ulbrich  28:42

Tim, let me mention a few resources for people that want to dig deeper, and this will link to these in the show notes. It’s been a while but we did a whole series on retirement planning, digging into the question of how much is enough, some of the alphabet soup of different accounts, building a retirement paycheck, things that you’ve been talking about that was episodes 272 through 275. Again, we’ll link to that in the show notes. And then 305, episode 305. We did a primer on annuities, a lot of myths, conceptions around annuities, we try to break those down, understanding what they are: fees, costs. That was a great episode. Again, we’ll link to it in the show notes. And then several of the risks that you’ve talked about, we put together a guide that’s all around understanding retirement risks. So it’s Retirement Roadblocks: Identifying and Managing 10 Common Risks. It’s a free guide that we have available. One of the most popular resources we have, again, that will be linked to in the show notes as well. Tim, one thing that struck me is you were talking you mentioned flexibility, right is a key. And this is a piece I think that pharmacists have a benefit of, right. Many pharmacists work in a position, whether that be hospital, whether that be community practice where they have an opportunity to do something like PRN shifts or work part time and make a good income. And so, you know, maybe the game game plan was a full retirement at 55, but because of some of the things that you talked about, maybe they either choose to work longer, full time or hey, if they want to pick up 15-20 hours, making $60-$65 bucks an hour, a lot of pharmacists have the opportunity to do that. And so I think that flexibility piece can be really important, specifically to our audiences as they’re thinking about retirement.

Tim Baker  30:12

Yeah. And what I This, to me, this stat still like is unbelievable to me. So this was these two stats were put out by a paper called The Power of Working Longer published in January 2018, by Stanford’s Institute for Economic Policy Research. And basically, it makes the case for working longer. That’s the best, you know, medicine for if you have a shortfall shortfall in income for retirement. But we talked about sequence risk Tim, so we know the market. So like, let’s say, you know, you know, 65, in, you know, 20 years from now, not quite there yet. But say the market is not going great. Deferring retirement by three to six months is like saving 1% more of salary for 30 years. Deferred retirement by one month is like saving 1% more of salary for the final 10 years. So, to me, there’s I know there’s a lot of pharmacists that are listening to this that I speak to, they’re like, I need to retire as quickly as possible. And I get it, I get it, I understand. But but to me, like the people that are most flexible from a lifestyle, from a timing, are going to be the most successful in terms of their retirement. So if you have a lever that you can pull that you can consult or you can do, you know, you can do a shift or medical, right, whatever that is, you know, whatever that that is like that’s going to benefit you and over and help the overall retirement picture. So those would be two stats, I would leave you with us on this question.

Tim Ulbrich  31:44

That’s great. And it’s a balance, right? We talked about this all the time, it’s a balance between, hey, you make enough of these concessions. And you could always argue, hey, I should keep working longer, right? So we’ve got to get back to like, what’s the why, what’s the purpose, but also be in tune with those numbers, which aren’t wild when you talk about one month of employment, and the impact that it has in terms of dollars that could have been saved. Our next question: how to different investment options such as stocks, bonds, real estate impact retirement savings? And I think, Tim, this is a really interesting question, because one of the things we lose sight of when we talk about nest egg calculations, retirement planning, we talked about these big numbers, 3 million, 4 million, 5 million, is that not all dollars are created equal? Right? Both in how are they invested, and the types of investments in which they’re in and then eventually, how they’re utilized to build the retirement paycheck. So what are your thoughts here in terms of how do different investment options impact retirement savings?

Tim Baker  32:37

Yeah, so this question is really about like asset classes. So when we talk about a traditional portfolio, you know, there’s a, we talked about a high level, you know, a 90/10 portfolio and it would be 90% in stocks or equities and 10% in bonds or fixed income. That 90% you can, you can draw even a finer line, you can have large cap, mid cap, small cap, you could have international funds, you could have emerging market, you could have commodities, you could have, you know, you could have sector funds that are just in biopharmaceuticals or whatever. You could have digital assets. So, the big news this year was that they released spot Bitcoin ETFs. Last week, Tim, they released nine, eight or nine spot theoreum ETFs, which have come on the market and started trading last Tuesday. So that can be part of your your asset allocation now, because they’re, they’re in ETFs. The bonds at 10%, you could buy a total market bond, or you could buy different types. You could buy munis, you could buy treasuries, you can buy a total market and international bond, like there’s lots of ways to kind of, you know, slice it. But you can also talk to, you know, real estate, you know, one of the things is like, you know, is it real? Is it real estate, you can hold real estate in a mutual fund or an ETF, or you can hold it directly. So, to me, this kind of goes back to the one of the earlier questions is, you know, the more stocks, there’s the potential for more growth, but more volatility and risk, the more bonds less potential for growth, but less volatility and risk. So I think, at a baseline, being in the right, asset allocation from a traditional portfolio is really important. And this is what I’m talking about is, you know, should you be in an all equity or, you know, a 9010, and then hit that cliff and then go to a 60/40 or 50/50. That’s what I’m going to talk about from a traditional, but the things that we have to overlay, Tim, and I was talking about this with you a couple of weeks ago, I was kind of lamenting the fact that we talked about like tax allocation with retirement with your, your investment assets. So we kind of talked about we went a little bit in column A, Column B, Column C. Column A would be pre you know, like traditional. So pre tax, so these are, you know, traditional 401 K traditional IRA, etc. Then you want a little bit in Roth, which is kind of tax free since you’ve already paid  the taxes. So this is like And when you pour out a Roth, if you have a million dollars, all that million is yours because you’ve already paid the tax man. And then the last one is a taxable account. So I was looking at my taxable account as a percentage of my portfolio, I’m like, oh, that’s exactly where I want. Now, I don’t have any designs on retirement before 59 and a half. So I don’t really need, that’s typically what you use a taxable account for the purpose of retirement. But I know like when I sell my real estate, that’s probably going to go into a taxable account. So like, like, right now, I know the plan is, it’s kind of unequal scales, though, they’ll be equaled out in the future, or when I sell my share of our business like that will probably go into partly a savings account, but partly a long term investment, you know, in the form of a taxable account. So to me, that plays a part of this as well. So I think the the idea is to be in the right asset allocation, as opposed to what I talked about, typically, the one that you’re it’s going to be more stock heavy is going to have more volatility. So the closer you are to retirement, or in retirement, the less you’re going to want to have, although it’s still needed for the kind of that longevity risk of like not live outliving your savings. Real estate, it’s going to be typically how you know how your whole net, whether you are a landlord, or if it’s in a fund. But the things that we haven’t really talked about this, as part of this is things like digital assets, things like commodities, cash – right now, Tim, you could, you know, with our cash accounts at YFP, it’s paying like 5.1%. So I’m looking at that, and like, if I’m a retiree, if I can park, my short term bucket there, I’m pretty happy with that return. Now, I know inflation has been ticking up higher. So maybe need a little bit more to offset that. But these are all the things that kind of construct the retirement, you know, savings and retirement assets. And I think, you know, doing it with a traditional portfolio, but then overlay in some of the other things that you have going on, you know, if you have a pension, that’s going to affect how you retire, you know, your allocation is, because if you have a if you have a pension plus social security, you might not have to be super conservative, because you might say like, Hey, my, most of my things are handled, or if I buy an annuity, I can be more aggressive, because I’m not going to have to withdrawal that as aggressively as if I didn’t have that annuity or that pension. So there’s lots of different things. But I think the rule of thumb is kind of looked at your stock to bond, you know, ratio, and understand that with stocks, again, more growth, more volatility. With bonds, less growth, less volatility.

Tim Ulbrich  37:30

And I think you just gave a great example there, why blanket asset allocation recommendations don’t work, right? Because, you know, if someone’s listening, and they have a pension, and they have social security, or maybe they have an annuity, like the floor that they’ve created, is completely different from someone else that maybe doesn’t have a pension or annuity, And therefore, they’re going to rely more on withdrawing from their investments. So how much risk they take with the remaining amount of whatever’s investable, and whatever buckets they have, could be very different based on you know, what those are? And I think this question gets at a couple different aspects of asset allocation, which you talked about nicely, but also a conversation. We don’t have enough, which is that d cumulation. Building that paycheck from what buckets are we taking from and how do we do that? And what order tax strategies all those things? And I think for people are listening that maybe have done the hard work, are nearing retirement, have two, three $4 million saved whatever the number is. That’s great. Now, hey, are we thinking about the decumulation side of this?

Tim Baker  38:30

Yeah, and that was one of the reasons, Tim, after going through the CFP coursework, you know, I decided to do the Ri CP, which is Retirement Income Certified Professional, because it really tackles that question that the CFP I don’t think does the best job. CFP is all about, okay, accumulation of accumulated assets and what that looks like. But once you get to that, that’s not the destination, then the next chapter, how do you take these buckets of money and build a sustainable, sustainable paycheck over time? Unknown, right. And actually, one of the open questions in in that is like, if you do build a floor for a client, and they’re, you know, they’re a 75 year old, but their allocation is something like 90/10 or 80/20. A lot of regulators will look at that and be like, that doesn’t look right. But you know, the justification, that’s why you can’t have a blanket, you know, yeah, one rule for everyone. The justification is like, we really don’t have to draw that much from that portfolio. Because, right, the floor is the floor, right? So I remember that being kind of like, oh, that’s odd. Because, you know, again, most, most planners, they kind of they go, they get social security in place. And then they say, Okay, what’s the total return? What’s the best optimal way to get the portfolio through the all the retirement years, but it’s much more nuanced than that. And I think, you know, it’s important to understand that.

Tim Ulbrich  39:54

And that’s why for the pharmacists that are listening, that are working for an employer, like the VA or whoever that still has a pension plan, be grateful for that. They’re not they’re not common, but it’s gonna play a huge role when it comes to building that floor  and creating that retirement paycheck. We’ve got lots more retirement questions. I’m gonna hit pause there. We’ll tackle more of those in future episodes, we’ve done a lot of information in a short period of time again, we got more resources. If you’re listening to this, and I want to learn more, make sure to check out the YFP podcast again, we’ll link to some of these older episodes in the show notes. You can go back and learn more, we’ve got more information on the YFP blog as well. We have more webinars that will be forthcoming related to retirement retirement planning that Tim and the rest of the team will be leading. So be on the lookout for those as well. For those that are listening and said, Hey, I really could use some one on one help with a qualified, certified financial planner, we’d love to have the opportunity to talk with you to learn more about your situation to see whether or not what we offer is a good fit in the form of fee only financial planning and or tax planning. If you’re interested in a discovery call with Tim Baker to learn more about the services, you can go to yourfinancialpharmacist.com you’ll see a link there to book a discovery call. Thanks so much for listening, Tim. Great stuff. We’ll catch you again next week.

Tim Baker  41:03

Sounds good.

Tim Ulbrich  41:06

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 in 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 yourfinancialpharmacists.com/home-loan again, that’s yourfinancialpharmacist.com/home-loan. 

Tim Ulbrich  41:51

[DISCLAIMER] 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 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 guaranteed 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 369: 10 Common Tax Blunders To Avoid (From 2023 Filings)


Sean Richards, CPA and Director of YFP Tax, talks about the 10 common tax blunders he saw and how to remedy those mistakes to optimize taxes in the year ahead.

Episode Summary

July might not seem like the time of year to think about your taxes, but for Sean Richards, CPA and Director of YFP Tax, it’s a great time to make projections for the year ahead and remedy any blunders from last year’s return. 

Reviewing 10 common mistakes he saw made with taxes in 2023, Sean breaks down ways to optimize your tax plan from utilizing HSAs, to adjusting withholdings, to making sure any side-income is planned for appropriately. Sean’s biggest piece of advice: planning ahead can help avoid these mistakes and can optimize your tax situation.

About Today’s Guest

Sean Richards, CPA, received his undergraduate degree in Corporate Finance and Accounting, as well as his Master of Accountancy, from Bentley University in Waltham, MA. Sean has been a Certified Public Accountant (CPA) since 2015 and is currently pursuing his Enrolled Agent certification. Prior to joining the YFP team, Sean was the Senior Treasury Manager at PRA Group, a global debt buyer based in Norfolk, VA. He began his career at American Tower Corporation where, over 10 years, he held several positions in audit, treasury and accounting.

As the Director of YFP Tax, Sean focuses on broadening the company’s existing tax planning and preparation operations, as well as developing and launching new accounting offerings, including bookkeeping, payroll, and fractional CFO services.

Key Points from the Episode

  • Tax blunders and optimizing tax situations with a CPA and tax director. [0:00]
  • Common tax mistakes and how to avoid them. [3:13]
  • Tax planning strategies and common blunders to avoid. [9:33]
  • Optimizing retirement contributions and HSA benefits. [12:59]
  • Tax deductions and filing status, with a focus on maximizing savings. [17:31]
  • Tax planning strategies for side income sources. [22:05]
  • Tax blunders to avoid, including not making estimated tax payments. [26:14]
  • Tax planning for small business owners, including extension deadlines and investment activity. [32:18]
  • Tax planning and law changes, including energy credits and potential future rate increases. [35:44]
  • Tax planning for pharmacists and households across the country. [41:34]

Episode Highlights

“Doing a projection mid year and identifying that you’re going to have a surprise bill or refund at the end of the year, or at least beginning to see that it’s trending in that direction allows you to begin fixing all those problems before they even become problems.” -Sean Richards [7:38]

“For small business owners or for a side hustle, when we’re doing projections about where you expect the business to land in profit and loss this year, and you have a pretty good idea, or at least you hope you do. But that can always change for anybody, not none of us can see the future. But the point here is, at least giving it some thought and trying to come up with a number and planning accordingly.” – Sean Richards [24:16]

“It all comes down to planning. To the extent you’re able to identify any kind of gaps in where you expect to owe money at the end of the year and can close them now whether that’s making estimated payments directly to the IRS or adjusting your withholdings, it’s much better to fix it now and get ahead of it.” – Sean Richards [31:57]

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. On today’s episode, I welcome CPA and YFP Director of Tax, Sean Richards, onto the show to discuss the 10 most common tax blunders that he saw pharmacists making during the recent tax season so that you can avoid these mistakes and optimize your tax situation. To learn more about our tax and accounting services you can visit yfptax.com. Alright, let’s jump into my interview with YFP Director of Tax Sean Richards.

Tim Ulbrich  00:41

Sean, welcome back to the show.

Sean Richards  00:43

Thanks for having me. It’s always a pleasure to be here.

Tim Ulbrich  00:46

So have you had a chance to recharge, recover? It’s now July. Tax season is behind us. But I know that work can linger on, that’s the nature of the business. How are you feeling at this point in the year?

Sean Richards  00:58

Yeah, I’m feeling good. Projection season. I mean, by the time this comes out, we’ll probably be in full swing there. But our projection season is going to be kicking off soon for most folks. But again, you know, we have some folks that are more complicated that we’re still kind of wrapping up 2023. Now, all by design, that’s where we’re taking the time in the summer where other accountants might be sleeping, I am catching up on some sleep, but also using the time to wrap up some of the more complicated returns, make sure we’re optimizing things for those folks. Maybe those projections are a little bit later in the year. So yeah, I’m feeling pretty good. I mean, there’s a little bit 23 stuff still in the works, but mostly close the book there. Looking a lot towards 24 and even 25 and beyond. So feeling refreshed.

Tim Ulbrich  01:38

Well, I’m convinced you’re gonna look back at this season of life as a blur at some point. I mean, you got young kids, tax season and owning business in that season. That’s a lot going on at once. So kudos to you and the work that you and the others have been doing on the team. So give us a rundown. You mentioned there’s some work still to be done individual business extensions. That would include Tim and myself as well. So we’re a couple of the stragglers, but how many returns have you in the team done this year on the federal and state side?

Sean Richards  01:50

On the federal side, we’ve probably locked down about 160 returns or households at least. So you got to factor in that you’re gonna have, you know, if you’re filing separate there, that’s that’s double on those returns. And then for each one of those, I mean, I’d say for each one, you probably average at least a state, because some folks have more states, some folks are in states like New Hampshire that don’t have state income taxes. So probably at least double that on the state side. And then you know, some some couple dozen or not, maybe not a couple of those in but a few business returns on top of that, and yeah, it definitely adds up quite a bit. So there’s only a couple hanging out there right now. If you’re listening, by the time you’re listening, you’re probably actually going to be filed unless you’re Tim Baker and haven’t submitted any of your documentation yet, but everybody else should be all set by the time you’re hearing this. So yeah, we did quite a bit this year. Maybe not as many number wise as before, but definitely, you know, more complex returns where we’re able to get in there and really do that maximization during the year. It’s awesome. 

Tim Ulbrich  03:13

does Ohio still win the award for the most difficult state to deal with? Or do we have a new winner this year? 

Sean Richards  03:20

No, Ohio still number one, as far as most difficult, just given the different municipalities and how you know, some of them are part of the RITA system some of them are completely not not the worst as far as the worst state tax liability that probably be somewhere out west California, Oregon’s up there but yeah, Ohio, I think still is the most annoying. 

Tim Ulbrich  03:41

Our tax liability here in Ohio very friendly, especially for small business owners. Grateful for that. But the bureaucracy of the RITA system, known as the regional income tax authority, shout out to them for listening wish I can assure you they’re not listening. But makes it very difficult because not everyone is in a RITA and just the complexities of dealing with that. So certainly feel for you and others during the season when you’re dealing with the nuances of a system like that. So anyways, not what we’re here to talk about. Let’s jump into the most common mistakes that you saw pharmacists making, the blunders during the tax season. Really an opportunity for us to learn and opportunities, were in the middle of the year. And we’ll talk about the importance of doing projections and looking ahead, but as we hear some of these common mistakes or blunders, it’s a great reminder of what tax planning can we be doing throughout the year. So we’ve compiled 10 I’m sure there’s many more and there’s some layers within each one of these but let’s jump into our list number one, on the list. Perhaps the most common probably will always be the most common is getting a surprise bill or refund at filing. What’s the usual cause here, Sean of some of these unwelcome surprises.

Sean Richards  04:56

And the reason we always have this number one we probably always will unless there’s some sort of broad tax reform in this country is that there’s so many different things that can cause that to happen, that I couldn’t even begin to answer. I mean, I can give some examples, you know, you could under withhold, you could have a side gig and not have, not plan accordingly. But, I mean, we have 10 things on this list, or I guess nine, not including that first one. And they all can kind of result in that number one issue of getting that big refund back, which, you know, that one might surprise some folks, because you might hear that and think, Well, what’s wrong with getting a huge refund back. But if you’re getting $5,000, back in April, that’s $5,000, that you could have been utilizing more efficiently, evenly throughout the course of the year. So you know, that side or the worst side, even, you know, the other opposite is owing that at the end of the year, and nobody wants to have that. So there’s just so many different things. We’re gonna hit on a bunch of them while we talk through this. But I mean, to even start talking about what the causes of that could be. I could be here all day. 

Tim Ulbrich  06:00

Endless possibilities, we’ll get to those throughout the list of 10 of where the most common ones are coming from. As you mentioned, it’s the surprise bill that causes the most pain, right? Even though this year, the number of people that reached out to us post tax deadline, say, hey, I’m interested in learning about what you offer for tax services. If they came after the tax filing deadline, I can assure you that most of them were because, hey, I just got through that that was a mess. I owed money. I don’t want to ever do that again. Right. So the good news is, there are remedies to that problem. There are solutions we can put in place, there are planning that can be done. And changes are going to happen. You know, as we think about the things that can result in those surprise bills that might be causing that to be the case. And so we can with diligent planning, be able to make sure hopefully, that doesn’t happen again in the future. So to that point number two on our list, which is the remedy to the surprise biller refund. Number two is not performing a tax projection. And Sean, talk to us about why this is important, when the projection should happen, what we’re looking at in doing that projection, and to be frank, most people aren’t doing this. 

Sean Richards  07:10

Most people aren’t. I mean, pretty much anybody I talked to who’s not a client working with us, has never really even heard of doing this or they’ve done something like it, but it’s not as formal of a process. And it may not be fair to start with number one being the overarching problem for all tax returns. And then number two sort of being the solution. And if you didn’t do that, that’s our, our issue. But frankly, I mean, not doing this piece really is the biggest second issue because doing a projection mid year and identifying that you’re going to have a surprise bill or refund at the end of the year, or at least beginning to start to see that it’s trending in that direction allows you to begin fixing all those problems before they even become problems really. And so a tax projection is basically just doing a little bit of an estimate of what your your where you expect your tax return to be at filing time. And as silly as that sounds or as simple as it sounds, it’s not something that a lot of people do. And a lot of it’s because you know, tax returns, there’s a lot of complicated or not complicated, but there’s just a lot of different inputs that come into it, you have your credits and your deductions, and you have various sources of income and having all those pieces kind of in your brain and trying to think about how they’re all being covered off. And then getting to the end of the year. And throwing it all on paper is is just chaotic. So doing something around this time of year, or at least mid year for your kind of tax cycle. So if you’re filing every year around tax day, or in the springtime, mid year, July, August, great time to be doing it. If you’re maybe extending and you’re more complicated, and you’re filing a little bit later in the year, you know, you can kind of flex accordingly. But basically, you want to give yourself enough time where you’ve seen enough of the year that you know kind of what’s been going on, what you expect to have happen throughout the rest of the year and maybe even early next year. But you also have enough time to make adjustments based on that. So you don’t want to do it too early. You also don’t want to do it too late. And ideally, you want to have your prior year return kind of solidified and everything to use as a basis. So yeah, I mean, again, it’s it sounds like a simple kind of concept. But it’s something that a lot of people don’t do, and just that one little activity will open up so many areas for you to improve your tax situation every year. It’s outstanding. 

Tim Ulbrich  09:33

These are the situation that again, there are endless possibilities. Right. You know, I’m thinking of the common ones that I’ve heard you talk about, hey, we bought a rental property. We switched jobs, you know, significant change in income. Got married. We had a child. Started a business, a side hustle. I mean, there’s there’s so many things that can adjust and change what our tax liability is going to be. I mean, I just lived this firsthand with you, Sean. As we think about our situation, we pay quarterly estimated taxes when it comes to the business income. When went to go make our first quarter payment, you know, we did kind of rough rough calculations number. We’ve got a well oiled machine process system that you’ve helped us develop internally. Made that payment. And then we said, hey, when we get to the quarter to like, based on what happened last year, my individual situation, I’ve got four kids single, single income in the household, let’s do a projection. And then from there, figure out what is the amount that we should be looking at based on Q2. And the reason why that was really important in my own plan is, as we had suspected, I probably didn’t need to make a Q2 payment or a very big one, because of what we made in Q1 and what the liability was projecting to be for the rest of the year. So to your point, we’ve got to have that return, complete or near complete. We’ve got to have some idea of what may or may not be coming here in the second half of the year. And then you’ve got some cool software that you can run some analyses. And we can put a visual to this, which I think really helps people understand how the tax liabilities work and how we want to think about making these payments.

Sean Richards  11:02

Yeah, I agree seeing it visually and kind of understanding Ah, okay, that’s where that comes into the equation. And this is where this is going to kind of fall into it. And I mean, even something like that. My first question back to you is, you know, what do you expect? I mean, I guess the answer is coming from me as your accountant. But what do you expect your business to have in profit or loss at the end of the year? And a lot of people don’t even really think about the fact that they have to answer that question first before we can even get to that. So it really starts getting you thinking about all the different inputs that ultimately work their way into that one little line on your return.

Tim Ulbrich  11:05

And this is where you can see like, hey, if we pull the lever, and we max out the HSA, or we put money into more into the traditional 401k, whatever might be the outcome, like what does it actually change when we get to the bottom and we look at the tax liability. So really powerful if we can get that projection process in place. So that was number two on our list of 10 common tax blunders to avoid. Number three on list is undervaluing the power of the HSA. We’ve talked at length on this show about health savings accounts. We’ll link to in the show notes our previous episodes on HSAs. Talk to us, Sean, it surprises me a little bit to be honest, that we’re still seeing the HSA be underutilized.

Sean Richards  12:16

Yeah, I think it’s one of those things and I think you, you certainly don’t see it once you’re kind of working with us. And you’ve been able to kind of see the power, hear us talk about it, or visually show, hey, this is what could have been or anything like that. But I think it really kind of comes down to sort of just the education in the country broadly about some of these things like 401K, HSA kind of everything. You know, you get thrown into your first job out of college, and you have to sign 1000 pieces of paper in your onboarding stuff from HR and put you know what percentage of this you want and traditional Roth and all these numbers kind of get thrown out there, and you lose the benefits or you think, hey, maybe I’ll I’ll throw some percentage here and some percentage here and some percentage here. And that’s, you know, obviously a pretty good strategy as far as spreading things out and stuff, but HSAs have a triple tax benefit. Most if any other retirement vehicles have that. So by not maximizing that HSA, if you have that available to you, you’re really losing out, even if you are kind of spreading the love to other places first, I mean, you want to really be able to get that triple benefit there before you start going elsewhere. So when I say triple tax benefit, when you make your contributions this year, or if they’re coming out of your paycheck, that’s a tax deduction, or it’s coming out of your taxable income, reducing your taxable income, the growth of the investment tax free. And then when you take it out, assuming it’s for qualified expenses, also tax free. So usually you’re getting one maybe two of those, like you tax free now, but then you pay the tax in the future, or vice versa. This is the only one that has that that triple, so it’s awesome. The one thing I will say there is that on the flip side, I’ll see plenty of times where you know, you get excited and sign up for the first time and might miss you know, you’re working a couple jobs or something and over contribute. So it as long as it’s something that you catch, not a problem, we can fix that even if we get past the end of the year, you know, you can have those things returned. But something to try to get ahead of, as I say with great power comes great responsibility. So a lot of power with the HSA. But rules just like everything else to keep track of and limits and everything. So you just want to make sure that you’re staying on top of those two.

Tim Ulbrich  14:28

Yeah, tracking expenses, are they qualified, making sure you’re using it appropriately? All important things. You know, I like to refer to the HSA as a legal tax avoidance vehicle. Right. So that’s a good one. To your point, we don’t see that in other accounts. And so, you know, I think there’s always the debate of, Hey, am I actually going to potentially need these funds for qualified health care expenses, and if so great, we can get the tax benefits. If not, and or I’m not projecting that I’m gonna need it, then there’s some options to use this as, you know what we call kind of a stealth IRA potentially, another option when it comes to long term savings and investing. Alright, so that’s number three. undervaluing the power of the HSA on our list of 10 Common tax blunders to avoid. Number four is not optimizing retirement contributions. Tell us more here. 

Sean Richards  15:21

So, that kind of follows the HSA thing, as you were sort of alluding to there. And HSA is kind of like a retirement vehicle. It’s sort of intended as being used for health expenses, but it can also kind of be used as a retirement vehicle. So that is, can fall under this umbrella. But what I’m talking about here is, you know, you hear IRAs, 401Ks. Another great example of where you start your first job, they start throwing all these things out at you, you know that there’s tax benefits, you know that you should be putting money into these things, but how to actually optimize that. And not only that, but how to actually optimize it for whatever your broader financial strategy is. Because I’ll have folks come to me and say, Hey, should I max out my 401K? Well, first off, do you mean traditional 401k? Or do you mean Roth 401k? Traditional, you’ll have the tax savings now, Roth you get in the future. And you know, that begins to go back to well, though, the question that I’ll get is, Well, which one should I do? And the answer is, you know, what is your broader financial plan? Where do you think you’re going to be? I mean, I’ll tell you now, as the tax guy, traditional 401k is going to give you the tax savings now, you look good, I guess, when we do our returns, but is that really what’s going to be the best for you and your financial situation, given where you expect to be in the future. So knowing that breakdown, I mean, even just I talk about IRAs and 401K’s people use those interchangeably. They’re very, very different. They’re very, very similar. They have, you know, similar components, where you have traditional and Roth to choose from, you can have pre tax components and non pre tax components. But they’re very different in the sense that there’s different limits that apply to them. There’s different phase outs, whether you’re in, you know, make more income and everything. So just understanding even Hey, what, what options do you have? Let’s start with that. And then from there, what are your financial goals? And how can we make the options available to you best suit those financial goals? So there’s just a lot being left on the table there. And I think it all comes back to you know, not planning ahead of time. 

Tim Ulbrich  17:26

And Sean, your your example of you know, when somebody comes to you and says, Hey, should I do Roth? Should I do traditional? And you say, it depends without saying it depends, like Tim Baker says it depends. But that’s really what you’re getting to is it does depends, because we can’t make that decision in a silo. And this is why we believe so much in the value of having a CFP and a CPA on your team that can communicate and talk with one another and really look at these decisions, you know, as you’re making a decision on what investment contribution or if you’re approaching retirement, and you’re thinking about the withdrawal phase that has tax implications, has planning implications, you put those two together, and we can start to look at the whole picture and make that decision that’s optimal. Number five, I’m curious about this one, Sean. So you’re referring to number five as quote, wasting itemized deductions? I’m curious, because it feels like with the rise in the amount of the standard deduction, that itemized deductions maybe aren’t as prevalent or common. So what are you referring to here?

Sean Richards  18:27

Well, that actually is what you just said, is actually one of the things that I’m kind of getting at there. And that’s kind of not factoring in the fact that the standard deduction is getting higher every year, and it kind of continues to go that way. And so, you know, traditionally, we’ve all kind of had this idea of once you buy a house, you’re gonna itemize deductions, and you have all these sort of miscellaneous deductions that come into play. But a few years ago with the the tax law changes, and the Tax Cut and Jobs Act, a lot of that stuff went away, and a lot of the deductions were either limited or or outright removed in favor of that standard reduction going up. And when I say wasting, you know, there’s a couple of different things here, but particularly, what you just said is, if you have a lot of itemized deductions, but they don’t hit that standard deduction amount, and you end up still taking the standard deduction, which is what we would typically do, you know, barring any other kinds of reasons why we couldn’t, a lot of folks feel like they’ve lost their itemized deductions. They’re like, wait a minute, wait a minute. So you’re telling me I, I put $1,000 towards charity last year, I paid this much toward my mortgage, and I paid this much in taxes, and I’m not, I don’t get credit for that?

Tim Ulbrich  19:35

That’s what the standard deduction is! 

Sean Richards  19:36

Yeah. And it’s hard to say, you know, you don’t get credit for it. But the standard deduction is more, so we’re going to take that and, you know, that’s, that’s what’s gonna give you the best savings. Now, there are ways to maximize that if you do kind of look at it ahead of time. You might have the ability to do something that we call bunching where you say, hey, let’s try to pull itemized deductions into one year and itemize then and then have less than another year and take advantage of that higher standard deduction. Or you know, you have PSLF is a huge thing, right, of course, with pharmacists. And typically when we have folks that are doing PSLF, we want to look at filing status and potentially filing separately. And when you file separately, you that brings in new itemized deduction, when you itemize, your spouse can’t take the standard deduction, vice versa. So you have situations there where you have one spouse that’s paying a bunch towards mortgage interest. But at the end of the day, you both take the standard deduction, there’s just a lot of things that can kind of come into play there. And that’s one of the ones that you really don’t have a lot of flexibility with after the fact. I mean, that’s the case with a lot of tax stuff. But this in particular is one of those things that you really want to think about it ahead of time, like where what filing status, are we going to be possibly filing as, what’s the standard deduction, what do we have for itemized deductions and try to maximize it as best you can? Because there’s nothing worse than telling somebody, yeah, that money that you donated, I mean, it’s great for you morally, but it’s not gonna help your taxes this year.

Tim Ulbrich  21:04

So Sean, let’s talk about bunching a little bit more, I think this is something we’re seeing more common among our clients and questions, and maybe just an awareness and an education about who this might be a good fit for. So if I’m following this correctly, if we if we look to 2024, the standard deduction for married filing jointly is going up to $29,200. So if someone’s listening, and they were to itemize, which again, it wouldn’t make sense if it’s below the $29,200. But if they weren’t itemizing, it’s $25k, $26k, $20k. Somewhere in that range, or ish, like, that’s where you start to look at and say, Oh, are there opportunities that, hey, maybe some of the giving we have planned for next year, or other things that we could push into this year? Maybe we itemize one year? And then the next year we go standard? Am I following that? right? 

Sean Richards  21:50

Exactly. And it’s one of those things, this is an example where the visual, I think, makes the most sense, because we can put a couple examples next to each other and say, like, Hey, this is what it’ll look like if we take the standard deduction every year. But this is what it looks like if we sort of shift these things around. And for some folks, you might not even have the ability to make those changes, right. Like if you’re, if the primary driver of your itemized deductions is your mortgage interest, and you’re not really doing any charitable contributions, there’s only so much you can really do about your mortgage, that I mean, maybe you can prepay interest or something, but that’s not going to change a lot. You have other folks who may have, you know, mortgage or lower mortgage interest, taxes get capped at 10k, too, as of right now, with the with the law changes I was talking about earlier. But you also so you might have some people who have a huge number of charitable contributions, and they can pull that lever and like you were kind of saying, hey, maybe we pull them into this year, or defer to next year. But the big thing I’ll say there is that a lot of people will then kind of come back to me and say, well, that doesn’t fit my giving strategy. I, I do a certain percentage every month, and it goes that way. And I don’t want to change that because that would change, you know, the way that the church is able to use my money or something like that. And that’s perfectly fine. I just want to have those discussions ahead of time, and be all on the same page and say, Hey, we’re making this decision for a reason, not looking back and saying, ah wish we had done this, you know, last year, maybe next year.

Tim Ulbrich  23:20

As we talked about all the time on the financial planning side of the business, right? financial decisions, or combination of the math, and how do we emotionally feel about those decisions, right? Same thing here, we might look at the giving strategy and say, You know what, we’re willing to give up a little bit of potential tax savings, because we want to give in this matter, so be it. Let’s just look at the options and what we have available. Number six is not saving for taxes when earning additional income. I’m laughing because I know this comes up all the time where you know, side hustlers, new business owners, people that are launching something, they’ve got some revenue, and then there’s a oh, crap moment, right?

Sean Richards  23:52

Yeah. And this one is tough because I mean, no one has a crystal ball. Right? So as I was just saying on one of the ones before, my question to you, when we’re doing projections is where you expect the business to land in profit and loss this year, and you have a pretty good idea, or at least you hope you do. But that can always change for anybody, not none of us can see the future. But the point here is, at least giving it some thought and trying to come up with a number and planning accordingly. And the biggest thing I would say here is not only just thinking about it, kind of in a one track mind, really thinking about the many different implications that side income can have. If you have self employment income, you’re going to have regular ordinary income tax on that just like you would if you’re working a W2 job, but you’re also going to have self employment tax on that, which is basically the government’s way of saying hey, we want the FICA that you’d be paying, we’re withholding as an employee and the FICA that you usually don’t see your employer pay for you in a W2 job. And that’s, you know, 17%. So all of a sudden you have that plus your ordinary income tax rate and you’re looking at 30 something percent at the end of the year. And now again, there’s different deductions that come into play, there’s a lot more that go into the broader calculation, but at least you know, getting ahead of that and saying, Okay, I’m expecting my business to earn 50k this year of of net profit. I’m going to have to pay income tax on that, self employment tax on that, state tax on that, at least saying, Alright, this is what I expect my liability to be at the worst. And putting aside a percentage of that or something. Again, and I probably sound like a broken record, it all comes back to planning and projecting and thinking ahead, because nobody wants to get to the end of the year and have their accountant say, Awesome work. First time, you know, doing the side gig, you made a bunch of money, now you owe a bunch of taxes. So again, just getting ahead of that putting the money aside, doing the math on it, thinking about those other taxes. If it’s rental income, you don’t have self employment tax, but you have passive loss limitations. So if you have a rental property, and you have a lot of losses there, you’re not necessarily going to be able to take those against your active income because of different limitations. So probably now starting to put people to sleep. But it all goes back to really trying to think about where those other side income sources are, and what is possibly going to hit your return at the end of the year.

Tim Ulbrich  26:13

Yeah, and, you know, to be fair, we also have to be realistic, right? So for new business owners, new side hustlers, you know, you can only do so much planning. Now, once you’ve got a couple years under your belt, you kind of get an idea where things are going, you know, just like we do in the business, you do some projections, even then we get it wrong, but we’re within the realm, right, because we’ve done it for seven or eight years, when someone’s launching a brand new business, your side hustle, you know, they may think they’re going to earn $50,000. And they end up earning two. Or they think they’re going to earn two and earn 50. Because they just don’t know, right at that point. So I think in those cases, you know, you don’t have a great bookkeeping system, that’s going to take time for that to build up, of course, but the point being set aside a percentage of the income to be conservative, call it potential tax. And then as you get further along, there’s going to be more detail to be done and what those projections are, but just don’t spend it all and have nothing there for tax.

Sean Richards  27:08

Right. Just put something there. And the other thing that that you mentioned that I almost forgot about is the fact that I’m kind of just broadly saying, Hey, Tim, what’s your profit gonna be in your business at the end of the year? For a lot of folks, you know, just figuring that out is difficult, you might be able to say, hey, I have a client that’s going to pay me $10,000 this year. And so I’m going to $10,000 of income. Well, yeah, that’s true. But we’re also going to have expenses. And the first question I get are, well, what expenses can I deduct? So asking those questions now, and talking about the different things that are deductible, what fits as a legitimate business expense, all those things is much better than at the end of the year, sending me a 1099 and saying, Hey, I made 10 grand. I don’t have any expenses. Let’s try to figure it out. Right. It’s just trying to get ahead of those things and thinking about it now. That’s where you can start making decisions and not being reactive.

Tim Ulbrich  28:03

Number seven, on our list of common tax blunders to avoid, many of these coming from the 2023 filing year that we just wrapped up is not making estimated tax payments. And, you know, the question here being, I think, who does need to be making estimated tax payments and what’s the blunder here? 

Sean Richards  28:22

Yeah, and I probably could have reworded that a little bit. But estimated tax payments, it kind of follows right after the the question above in the sense that most folks here are probably going to be folks that earn additional income. And when I say additional income, I mean income from sources non W2 where you don’t have those withholdings. So typically you think you get your paycheck every two weeks. And the employer, the payroll company is withholding your share of FICA, federal income tax, state income tax and remitting that to the government. Because think about your least financially savvy friend at the end of the year, if they didn’t have that happening, would they be able to pay their taxes? Probably almost certainly not. Because I see a lot of financially responsible folks who are very, very well educated and great with their cash and they still struggle the to put money aside the end of the year, let alone you know, people who are completely struggling. So the government recognizes this. They want your your cash on a regular basis. And for most folks, that’s going to be withholdings. However, if your withholdings aren’t covering off for whatever reason, whether you’re not withholding enough at your W2 jobs, or as I said is more of the common case you have side income, you should be making estimated payments to supplement it. So the rough rule there is if you are going to owe $1,000 at filing time, you should be paying estimated taxes. The first question I would probably get from someone is am I expected to owe that? And then of course the answer is well, let’s do a projection and find out. But basically, yeah, once you do a projection if you’re looking at this, and you can do it multiple ways where you’re starting with your business, but whatever, you gotta you have to keep in mind all the different pieces, right? Like I, a lot of people will say, Hey, I have this business, how much should I put aside for it and just like the example we just talked about, if I told you to put aside 30% to cover off on your income tax and self employment tax or whatever, that’s not necessarily going to work for you because you might have a ton of credits from children or you might have, you might have bought an EV this year and are getting a big credit. So you have to think about all the components and then look at and say, All right, am I going to owe or am I not going to owe. And when you get to that point, if it’s if it looks like you’re going to owe more than $1,000, either adjust withholdings or you should be paying in regularly. So estimated taxes is basically whatever that balance is that you expect to owe. They just want you to pay that in evenly quarterly throughout the year. It’s not perfectly quarterly because the IRS can’t be that easy about things. But it’s basically saying, Hey, we don’t have withholdings, so send us in that piece that you’re missing, that you should be withholding every few months to supplement. The one big thing I will say here is that a lot of folks will assume, hey, and especially with extensions, right? If you and I’ll say this till the day I die, if you file an extension, it gives you six months to file, but not to pay your ta liability. Like a lot of folks will say, as long as I pay my tax liability by tax day, I’m good to go no matter what. I mean, even if I do an extension, as long as I pay that money, then I’m fine. But the piece that I try to hammer home for folks is that even throughout the year kind of thing, the quarterly thing I was mentioning, so if you’re expected to owe 10 grand, and you go at the end of the year and pay that in April, when you file, the IRS is going to be angry and say hey, you should have been paying that in the year here. And they’re going to slap you. Yeah. So again, broken record, all comes down to planning. But to the extent you’re able to identify any kind of gaps in where you expect to owe money at the end of the year and can close them now whether that’s making estimated payments directly to the IRS or adjusting your withholdings, it’s much better to fix it now and get ahead of it. Then the flip side and trying to you know, request a penalty abatement in the back end.

Tim Ulbrich  32:18

Yeah, just to reinforce a an important point you made, Sean, is that if you do file an extension, which to be clear, like is not a bad thing. 

Sean Richards  32:26

Not at all whatsoever. 

Tim Ulbrich  32:28

Yeah, we really believe as we say over and over again and right over rushed. And there’s a value in the extension process. But that is not a pass on paying your tax that is due. So there’s work that has to be done, when you go to file that extension to figure out like, Hey, do we have a tax liability due, so we can make that payment, but we’re giving ourselves an extended time to be able to finish everything up and actually get the return in.

Sean Richards  32:52

And I mean, that might have even been an extreme example, like if you didn’t file an extension, even which again, I think extensions are one of the most underutilized things in the tax code. But if you didn’t do that, and you still owed at the end of the year and paid all that money in on December 31, the IRS is still going to be mad because they’re still going to say you should have been paying it in January, February, March, April. So the name of the game here is just making sure that you’re not ever getting too far away from where you expect your tax liability to be and what you’ve paid in any given point in the year. 

Tim Ulbrich  33:26

Which is why for the small business owner listening, this is why it is so important to have a system that is operationalized in your business where you have books and records that are being kept, whether it’s quarterly, whether that’s monthly, whatever your business needs, and you’re able to then use that information to feed into what you need to be making in terms of those estimated payments. So I’ll preach that. And I’ll preach it saying, Hey, we have it’s taken us a while to kind of figure this out. And to get into this rhythm and it’s not going to be perfect. It’s going to be you know, messy as you’re developing it. But so important over time as you get some stability in the business to have that type of system and predictability. Number eight on the list is overlooking investment, activity. Activity being the key word here, right?

Sean Richards  34:11

Yeah, so this is a lot I could you know, another example of one where I could spend a whole session or whole podcast going through this. But really, the big thing here is just thinking about the different types of investment activity that you may have. And right like you just said activity is kind of the name of the game here. So just because you have investments doesn’t necessarily mean that you’re going to have a tax liability or any kind of tax implications associated with it. But thinking about what types of activity you had going on in a particular year and making sure you’re getting ahead of that is going to be crucial, especially now with all these different types of types of stock performance incentives that folks have so restricted stock units, RSUs; employee purchase, employee stock purchase programs, ESPP; ISOs, incentive of stock options. All these different things, they’re all great. It’s just one of those things where you want to make sure you’re at least understanding the tax implications beforehand, because for some of those, you know, you won’t actually have a any kind of thing to do necessarily, or liabilities to take care of until you actually go and sell some of those shares. Typically, that’s the case. But again, just understanding how that works, knowing that you might need to get additional information to your accountant, hopefully us, to be able to adjust basis for taxes that you’ve already paid. I’ve seen a lot of people who paid double on some of these things, because they already paid when they were when some of the stocks vested. And then kind of paid taxes on that a second time when they sold those, those stocks. So lots to think about there. I mean, there was higher interest rates last year across the board. So a lot of folks had higher investment income, like interest income and stuff, which is great. But again, just something you want to plan for, there’s usually no withholdings there, you start making good money, the net investment income tax comes in. So that’s just a little additional tax on investment income. But it’s one of those things where the more I talk about it, the more people are probably spinning their heads. But a lot of folks have a lot of different types of investments, whether you think you do or you don’t, you know, even just having a few bank accounts and a couple shares of stocks here and there is enough that if you’re making moves on those, those can really affect your taxes. So just making sure you’re taking advantage of anything. And again, really think about the activity that you had in a year. What did I do? Did I sell anything? Did I buy anything? Did I convert anything? That kind of stuff.

Tim Ulbrich  36:36

We don’t typically think about, you know, interest in high yield savings accounts as being significant enough, right, that we have to plan for it. As you mentioned, we don’t have withholdings, right, that come out of your high yield savings account interest. However, when we think about this past year, especially people may have higher amounts in those accounts for people listening to that $50, $100, $150,000 across high yield savings accounts, earning four and a quarter, four and a half percent. That adds up pretty quickly.

Sean Richards  37:01

That’s literally what it is like, and, you know, we would do projections and get really, really close for folks, but be off by you know, a few $1,000 at the end of the year and looking at and saying, Hey, what what was often our, or what did we miss in our in our assumptions when we were looking at this? And a lot of the times we’re under estimating just simple interest income because people had cash sitting in some of the high yield savings accounts. But if you’re in high tax brackets, and you have that net investment income tax coming in, all the sudden a few $1,000 of income is a few $1,000 of taxes. So yeah, not a bad thing. But just something you want plan for.

Tim Ulbrich  37:39

Number nine on our list of 10 Common tax blunders to avoid from the 2023 filings is misunderstanding some of the tax law changes. What what are you referring to here?

Sean Richards  37:49

Yeah, so this one is going to be a little kind of twofold. So typically, when I’ve been saying tax law changes, the biggest things in the past few years have been energy credits. So the Inflation Reduction Act that Biden signed a couple of years ago, really expanded a lot of EV, green, other types of energy efficient credits. And those have been awesome for many folks, lots of good tax savings there. Again, it expanded a lot of things that apply, and it got rid of a lot of the limits that used to apply for some of these things. So there’s a lot of savings to be had. And tax credits. This is that’s what all of these kind of EV and green credits are, they’re their credits, those are dollar for dollar savings against tax liability, as opposed to a deduction, which just reduces your taxable income and really only reduces your tax by the percentage of your of your rate. These are credits. So it’s bang for your buck, the big deal. The only thing I’ll say on the energy credit side is as much as there’s a lot of room to save, there’s a lot of misunderstandings of, hey, I bought a plug in or a hybrid last year. So where’s my tax credit? Well, some plug in hybrids count, but not all hybrids count. Or, you know, I did this work on my house. And I was expecting to only get this much of a credit, but oh, actually, it was solar. So it’s a 30% credit with no limit, you know, you can have the opposite side of that, and planning accordingly with those things. Again, not that it’s necessarily the worst thing in the world to have a big refund. But if you can think about it ahead of time and say, Hey, I’m buying an Eevee this year, and you know that you’re gonna get 7500 bucks back as a credit. Yep, there’s a pretty good chance you can adjust your withholdings this year and get some of that cash back now and not have to worry about it at the end of the year. The flip side, and this might begin to scare folks, but it is thinking about other kinds of broader tax law changes. And when I think about this, I think of the Tax Cuts and Jobs Act sunsetting. Which it’s supposed to be doing in 2026 or at the end of 2025. So a lot of the was things I was talking about the itemized deduction changes, but one that people might not really even have remembered is the fact that tax brackets all went down when that happened. And in a couple of years, those are supposed to go back to the rates that they were. Will that happen? Who knows, we have no idea who will the President will be what, Congress’s makeup will be. But having an eye on that, and knowing at least now, hey, in two years, we’re expecting these rates are going to go up. So being able to plan accordingly and knowing that, hey, in two years, itemized deductions are going to change quite a bit, or the standard deduction is going to change. Getting ahead of those things. I know, it sounds crazy to be thinking a couple years out in the future. But when we’re talking about projections and thinking about pulling levers, those things actually do start to come into play. So I don’t want to scare folks. But it’s one of those things where, you know, all of a sudden, there’s sweeping tax changes, and it’s kind of swept under the rug because of all the other political turmoil and everything going on. So something Yeah, I just don’t want lost on folks. 

Tim Ulbrich  41:02

It’s interesting. You bring up Sean the tax cut and jobs, I remember the passage of that, and 2016, you know, I filed graduated 2008. So I graduated, filed several years before that was in place, but you don’t think about that, right? As well, when when it’s going in the favorable direction of what that means to cash flow. But it’d be interesting, and we’ll see politically what would happen. You know, you can imagine some of the turmoil if that were to go in the other direction and impact on what could be.

Sean Richards  41:29

Exactly and you know, for most folks, your withholdings likely will adjust accordingly. So you’re probably not going to end up with like a huge tax bill, so to speak. But there’s a pretty good chance that in a couple years, you’re going to be paying in more of every paycheck towards the government. Or even worse, if you have a side gig, you might be having a liability building up that’s bigger than it has been in previous years. And if you don’t have a system for saving, you’ll be in trouble.

Tim Ulbrich  41:30

All right on the homestretch number ten on our list, what would it be if we didn’t talk about some of the real annoying stuff under estimating state and local tax complexities. This is your favorite topic, Sean? 

Sean Richards  42:08

Yeah, it is, because we’re probably what I will maybe not one of the few firms. But you know, there’s not a ton of firms probably that are virtual like we are and work with clients across the entire country, a lot of tax and accounting firms tend to be kind of specific to a regional area. So I’m probably you know, in a smaller minority, in a minority of CPAs that deal with this, but it definitely comes up quite a bit with our client base. And I think that’s a notion of, you know, just people doing a lot of traveling and moving. But especially with a lot of the careers now and being able to work remote. You know, you have people working from home part time, full time you have people doing traveling nursing or even pharmacy related gigs like that. And anytime you’re doing work and you’re crossing state borders, there’s most likely tax implications associated with that. And does that mean that you’re going to necessarily have to pay tax in another state, if you were working there briefly, maybe, probably not. But just understanding the different rules around those things and being able to maximize them too. If you’re living in a state where you’re you’re working in a state and living in a state and one has a higher income tax rate than the other, but you have the ability to kind of choose your residency based on the tax rules, you know, that’s something that you’d want to do ahead of time. So just thinking about those different types of things, making sure you’re withholding enough. Local taxes. There’s other states besides Ohio, but Ohio being the biggest one there. I don’t understand how, folks, you know, just working a job down the street can keep up with all those things, but local taxes, understanding where you live, what the school district taxes are versus the residence town tax versus the city town, you know, all these different taxes, it can be overwhelming, just under estimating how complex some of that stuff can be not having a hand on the wheel. I just talked about all those nine things. And those can all be applied to the federal income tax return. We’ll apply them all to the state and local returns as well. So I’m sure folks living in Florida, Texas, Washington, New Hampshire all shut off. But people in Ohio probably crank the volume on that last one there. So definitely not something to take too lightly. 

Tim Ulbrich  44:22

This is timely, and I was knocking on RITA earlier, but we are dealing with a RITA issue this week. And you know, just some lingering things and it feels like every once in a while we’ll get random notices from them for those that have a business that you sell product, you got sales tax. I mean, there’s just so many layers of things to keep up with. 

Sean Richards  44:39

Exactly and it goes back to kind of understanding the tax calculation and how all these things go together. Yeah, and sometimes visually really is the best way to do that and seeing like if I send an email to someone and say, Hey, in Ohio, you have this federal tax you have this schedule C, you have self employment tax. You also have Ohio tax, that you RITA and then you have a tax where you work, but also where you live. And then you also have a school district tax. People are like, What are you talking about? But when you actually look at where it falls into returns, it makes a lot more sense. So doing that only once a year to me just isn’t sufficient given how complex I see these situations becoming.

Tim Ulbrich  45:19

As Sean mentioned, at YFP Tax, we work with pharmacists, households, and others all across the country. So we have a virtual paperless firm that we’re very proud of. We also obviously supplement that with our financial planning services, which most of our listeners are well familiar with that. If you want to learn more about our comprehensive year round tax planning, what’s involved with that, I think we’ve laid out the case of why that is a good fit and a service that many people should be thinking about. But if you want to determine if it’s a good fit for your situation, you get a YFPtax.com You can learn more and book a free discovery call with my partner, Tim Baker to determine whether or not that’s a service is the right fit for you, Sean, great stuff as always, we’ll be talking more tax throughout the year. Thanks for taking the time to come on.

Sean Richards  46:04

Yeah, thank you. Have a good one.

Tim Ulbrich  46:06

You too.

Tim Ulbrich  46:08

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 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 Pharmacists 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 368: How Much is Enough for Kids College?


Tim Baker helps parents navigate saving for their child’s college education, from projecting costs and balancing goals to 529 plans.  

This episode is brought to you by First Horizon.

Episode Summary

Most parents desire to contribute toward their child’s college tuition; however, knowing how much to save and plan for can be a bit of a moving target. How much is enough to save for college?

Tim Baker, YFP Co-Founder and Director of Financial Planning, lays out the financial roadmap to help parents navigate the complexities of college savings. Tim emphasizes the importance of prioritizing college savings, projecting future costs, and balancing these savings with other financial goals. He also breaks down the benefits of starting early and making consistent contributions to make the goal more attainable.

Learn more about education savings options, including 529 plans and Coverdale education savings accounts. Tim also shares the ⅓ rule for funding college education that listeners may find make the reality of saving for their child’s future education more attainable. 

This episode is brought to you by First Horizon.

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

  • Saving for kids’ college, prioritizing investments, and mortgage options for pharmacists. [0:00]
  • Saving for kids’ college, varying opinions on approach. [2:13]
  • Prioritizing investing for kids college amidst other financial goals. [6:05]
  • Financial planning for education costs, including 529 plans and other options. [11:13]
  • Education savings options for kids, including 529 plans and UTMA/Coverdale accounts. [15:41]
  • 529 college savings plans with potential tax benefits and flexibility. [21:08]
  • Saving for college, including 1/3 rule and assumptions. [25:23]
  • Saving for college using 1/3 rule and financial planning tools. [30:02]
  • College savings for a 9-year-old girl, with current balance and projected needs. [34:39]
  • Saving for children’s education expenses. [38:39]
  • Saving for college and financial planning with a certified financial planner. [42:56]

Episode Highlights

“So your retirement should come before your children’s college tuition. There’s no financial aid in retirement, and there’s still a good amount of that, you know, for your kid’s schooling.” – Tim Baker [9:54]

“The further we go in the future, the more uncertainty. But we can make some educated guesses and conjectures. Again, it goes back to the whole idea of, it’s more about planning than the plan, because life happens, things change.” – Tim Baker [13:36]

“Saving for your kid’s college is just like your retirement. It’s like when I say to clients, hey, you need $2 million to retire, you are looking at me like I have 2 million heads. It’s a big number, way in the future. The same thing holds true with education. It just feels more than what it actually is.” – Tim Baker [43:01]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich  00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week, Tim Baker and I revisit saving for kids college, a topic that is top of mind for both of us in our own financial plans. Before we answer the question how much is enough when it comes to saving for kids college, we discussed the priority for investing, including where kids college savings fits among other goals, and the differences between common vehicles that are used for saving for kids college. Let’s hear a message from today’s sponsor, First Horizon, and then we’ll jump in our discussion of how much is enough when it comes to saving for kids college. 

Tim Ulbrich  00:40

Does saving 20% for a down payment on a home feels 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 with 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 a 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 pharmacist home loan is available in all states except Alaska and Hawaii, and can be used to purchase condos as well. However, rates may be higher and a condo review has to be completed. While I’ve personally worked with First Horizon before and had a great experience with Tony and his team,  don’t just take it from me. Here’s what Emily from Prattville, Alabama had to say about her experience with First Horizon: “Clear communication and excellent guidance from Gail and Cindy throughout the entire process. I greatly appreciated the fact that everything was digital, because I’m allergic to paper, the ability to upload inside everything digitally made the process very efficient, which I prefer. This was by far the best mortgage process I have experienced. This is my seventh when counting refinances.” So 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 yourfinancialpharmacists.com/ home-loan. 

Tim Ulbrich  02:13

Tim, it’s good to have you back on the show.

Tim Baker  02:15

Good to be back, Tim, how’s it going?

Tim Ulbrich  02:16

It is going well, this is gonna be a fun one. We’re discussing a topic that is top of mind for both of us in our own financial plans. I’ve got four kids 12 and under, you’ve got three kids nine and under. And we’re in that prime window where saving for kids college is getting real, right? We look at our older children and say, Hey, that’s not too far off. And it really begs the question, are we on track? And I don’t know about you. But for me, it feels like early on when the boys were much younger, younger it was this concept of hey, let’s start putting money away. And we’ll worry about that later. Worried about that later is right now.

Tim Baker  02:55

Yeah, life comes at you fast, right, Tim? So, you know, a lot of a lot of people, you know, they might say, hey, I’ll get to that, or, you know, I talk to prospective clients all the time and it’s like, yeah, I really want to, I really want to put money away for my kids college. And I’ve been thinking about it for a while. And, you know, I’m like, Well, how old is your son or daughter? And it’s like, oh, they’re eight? You know, so how long did you think about this? For eight years. So it is one of those things that sometimes that’s true, that holds true for retirement too, Tim so, you know, it’s it’s one of those things where the sooner you bet, you know, the sooner you do it, the better. You know, it makes, it makes the amount that you are, you know, your what you’re trying to do easier to kind of achieve. So, yeah, we’re right in the thick of it and and hoping that, you know, the cost of college, you know, doesn’t continue to kind of inflate at what it has in the past. But you know, no control over that, obviously.

Tim Ulbrich  03:48

Yeah, and we’re going to talk about that specifically because when we get to the part of trying to determine how much is enough, we got to make some assumptions on what is going to be the cost of college into the future. Now for those that are listening, that have kids that are butting up against college, we know what those numbers are going to be or likely be. But for those that have kids that are much, much younger, trying to project out 15, 16, 17 years, what college costs may look like, can certainly be more more challenging. Tim, I want to get your perspective on what seems to be a varying philosophy around saving for kids college. I recently published a poll on LinkedIn asking individuals how are you approaching saving for kids college and there was over 260 people that responded and here Here are the results. 30% said that they plan to fully fund their kids college. 61% said they plan to partially fund and just shy of 10% said you know what? They’re on their own. Kids got to figure it out on their own. So when you hear that and interactions you’ve had with clients and anything surprised you there?

Tim Baker  04:54

Um, I am surprised, I am a little surprised. I feel like, I feel like the 60% of like the partial would have been a lot more. Like that would have been closer to like 80. And they may be like 10 and 10. On, you know, the they’re on their own, or I’m going to do 100%. So that that’s probably the only thing. Because yeah, I talk to clients all the time. And it’s, it’s, it’s, it’s those three things. It’s like, Hey, I went through this. So my kid has to go through it, I went through this, I never want my kid to go through it. And then that in between of like, I want to provide something but I just don’t know what that is. So little surprised by the percentages, honestly, how big of a sample size was that?

Tim Ulbrich  05:37

Over 260 people. So pretty large group that responded. And there was a couple of comments that I think really, you know, drive home some of the differing opinions, and everyone obviously is there on their own journey. One person said, quote, they want to partially fund they referring to the kids, they need to have skin in the game. I’ve also heard of parents giving their kids cash directly for any scholarships they get. That’s a neat way of incentivizing working hard for them. Someone else said, Hey, would love to fully fund, but also need to look at my future and retirement. We’ll talk about that here in a little bit as it relates to the priority of investing, and how we want to think about kids college among other competing financial goals. So we’re going to break today’s discussion into three parts. Part one is going to be just that we’ll talk about the priority of investing, where might kids college fit into the broader part of the financial plan? Certainly, this is not investing advice, but some considerations there. Part two, we’ll talk about the common vehicles. And we’ll spend the most time on the 529 plan. And then part three will really spend time answering the question how much is enough. And I’m excited about that part because this is a piece that we haven’t drilled down into the details as much as the other two and for reference will link to these in the show notes. But we have talked about kids college previously, on the podcast, episode 195, we talked about how to save for your child’s education, and Episode 211, we talked about the ins and outs of the 529 college savings plan. So again, we’ll link to those make sure to check those out for more information. Tim, let’s start with that first part, which is the priority of investing. And I’m gonna go back to the comment that you made that, you know, for some people, especially when they came out with six figures or more of debt, you know, I’m thinking about my own journey of a couple $100,000 of debt, there can be a reaction of, hey, I never want my child to have to go through that either at all or something along those lines. And therefore, I’m going to start shoveling money into kids college savings accounts as early as possible. And not necessarily think about, you know, where that might lie in context with my own retirement savings or emergency funds or other parts of the financial goal. So it begs this question of where does kids college savings fit as a priority as we think about other investment vehicles or options? So what are your thoughts on that?

Tim Baker  07:56

Yeah, so, you know, I’ve had these conversations where people are like, I really want to get started and, you know, save for Jonny’s education or whatever. But you know, we’re looking at $25,000 in credit card debt, right. So not something that should be a high priority. We have to get through the consumer debt. So obviously, like, if we talk about the baby steps, we want to make sure that consumer debts in check, Tim, we want to make sure we have a proper emergency fund. Still a lot of people don’t, you know, come to the table with that. And that’s something that we have to work on. And what is a proper emergency fund? Where should we put it? It’s not an investment. Those that are based on I think, are the the big things, I’d be looking at it. You know, I think beyond that, you know, I think what most people would agree is shift into retirement and looking at what that looks like, you know, do we have a match? At least get the match? And then I think based on that, and again, I would be doing a retirement projection and a nest egg projection, I’d want to make sure that like some of the wealth protection stuff is sure enough, like, do you have the proper life insurance disability, that we have the state planning documents in place, all that kind of stuff, to then get back into the conversation of okay, what’s the next step after this? So a lot of people again, and the analogy that I like to use is like when you’re on the plane, and, you know, they say, Hey, if we lose cabin pressure and the mask come from, you know, that’s a really crappy situation, that’s not going to be fun. But put your mask on first, right? Put your mask on first before you you, you know, handle your your kids. So that’s going to be the same when we’re talking about retirement and an education plan. So your retirement should be should come before your children’s college tuition. There’s no financial aid in retirement, and there’s still a good amount of that, you know, for your kid’s schooling. We might get to a point Tim, where we’re not going to see the money flow as much for you know, for college loans and financial aid and things like that could be a real thing. reckoning that’s happening. However, I think there will always be alternatives, whether that That’s, you know, community college or trade schools are things that you can do that or at least get started. So that, to me is the big thing. I think when you get into the nuance of, of retirement, you know, the question I would I would ask to that person that clients like, are we on track for retirement? And if we are, obviously, like, let the money flow from an education perspective. If we’re not, that’s where I would want to, you know, and I think what a lot of people to Tim, they, what they do is, it’s not even really a question about what bucket they should fill. Part of it, part of what drives us is the tax benefits related something like a 529. So in Ohio, you can get up to $4,000 per student, regardless of filing status that is per year off of your Ohio State income tax. So a lot of people see that be like, boom, that’s what I’m going to do, or I want to get a portion of that without kind of doing the ABCs of where that should go. So I think outside of the match, I would say get the match. But then there’s probably a little bit more nuance in terms of like, okay, how do we then go from here, in terms of, are we putting more into the retirement? Are we are we putting more, are we starting to kind of, you know, flow monies into education planning.

Tim Ulbrich  11:13

Yeah. And what you’re sharing right there to me is such a good example of the benefit, one of the benefits of comprehensive financial planning. Because at the end of the day, we only have so much income to work with, hopefully, we can increase that income. We can only cut our expenses so much, and we’ve got a certain amount of cash flow, that we’re going to be able to assign to different financial goals, right. That could be building up an emergency fund that could be paying down debt, that could be a real estate purchase, that could be put money in a 529, that could be retirement savings for the future. And so we’re left with this decision of, hey, I’ve got all these balls potentially, to juggle in the air. How am I going to do that? And then what order? Second to it depends, probably the most common thing that we say on this podcast is you can’t make decisions in a silo when it comes to the financial plan. We’ve got to be able to take a step back and look at all the different factors so that we can see, okay, well, if I pull this lever, then what’s the impact of this part of the plan? Right? Because by pulling that driver putting money in a 529, that means we’re not probably doing something else. And are we okay with that or not? Okay with that. And if we project that out, what does that mean, for us in terms of achieving our financial goals? The other thing I would mention, and I know this episode is not focused on what we think is the future of higher ed. But because I spent over a decade in that space, I feel the need to comment, like, when you talk about something like the contraction, potentially, of access to financial aid and student loans, man, you’ve got to believe that if that were to happen in the future, there would be a significant shift in the business model of higher education at large, right? It’s already on the brink, I would say of some level of disruption, if that’s not already happening. And if there’s less resource going into the system, what does that mean, in terms of what the actual infrastructure looks like? The degree offerings, the supply and demand. So I think that is a relevant comment because one of the lingering questions behind all of this, especially for those very, very young kids is, what will this model look like in 15 to 20 years? What will the cost be? And that we need to know, or at least project out to some level to be able to do some assumptions? 

Tim Baker  13:20

And sometimes with uncertainty, Tim, like, we can do one of two things, you know, it’s like, Well, I haven’t seen people do this with retirement, it’s like, I don’t really even know. So they maybe they over save? Or perhaps they just kind of throw their hands up there. And like, okay, whatever I have, I have. So, you know, it is a little bit you know, the further we go in the future, the more uncertainty we have, again, we can make, make some educated guesses and, and conjecture, but again, it goes back to the whole idea of, you know, you want to be you want to, it’s more about planning than the plan, because life happens, things change. And the reason I’m kind of, you know, distracted, like, I’m looking at my numbers, Tim, and we’ll go through this later, but like the numbers for like, Olivia is four year like, they went up from the last time I talked to talked about it. So I’m like, Oh, I gotta update these numbers, because they’re a little bit out of date. And what that means is, like, when I looked at these last month, the inflation numbers associated with education were higher than what they were a month ago. So the tool that I’m using was updated. So I’ve kind of updated my calculator to kind of back into that. So like, it’s planning now again, like for Olivia, who’s going to turn 10 This year, I still have eight years to kind of, you know, plan and figure this out, which makes it easier. The closer we get, obviously, you know, when she’s 16 We’ll have a little bit more of a picture of what education looks like but a whole lot less time to kind of change and plan you know, plan for that. So yeah.

Tim Ulbrich  14:48

So let’s shift gears and talk about the common vehicles. Again, we’ve covered this a little bit on previous episodes that will link to in the show notes, but there are various options out there right when it comes for saving for kids college everything from 529 plans which we’ll spend the majority of our time on, to the Coverdell Education savings accounts, UTMAs, Roth IRAs, heck, you could just open a brokerage account and save that way if people wanted to do that, but there’s clearly some pros and cons to these accounts and perhaps why the 529 has risen to the top for many, as you know, I guess if we get picked the most popular among this group, so tell us at a high level about those common vehicles that are out there and then we get into the 529s more specifically. Yeah,

Tim Baker  15:30

So the Coverdales, and the like the UTMAs and UGMAS are very similar. These are just custodial accounts that are like brokerage brokerage accounts, but they have the minor’s name on there. So the reason the Coverdale is aren’t as popular anymore, it’s because the amount of money that you could put in per year was like two or $3,000. I’ve actually I’ve never I might have seen one Coverdale account in my career in financial planning, so I don’t see them very, very often, the UGMAS and UTMAS, I see more often and actually have one for all three of my kids. And then all of my nieces and nephews is kind of my, like my nephew, Timmy just turned 10 yesterday. So I put money into as you know, he’s, he’s he lives out in Oregon, so I don’t see him as much I don’t really know what he’s into from a from a gift perspective. So I just put some cash into that. And the big thing for that, it’s like, I’m managing the account. I’m the, I’m the guardian on the account, once they age, once they reach the age of majority. So in certain states, that might be 18, other states that might be 19, or 21, that money is theirs, right? So so that for me is going to be a gift when all of my nieces and nephews and my kids like turn that they can use now they could use that for school. But they could also use that for something else, right? There’s not the strings attached like a 529 has where you have to use it for qualified education expenses. So with my daughter I’ve talked about it could be for school, it could be she’s talking about a gap year, I’m like, How do you even know what a gap year is you’re nine. It could be it could be to start a business, whatever that is so and that, and that, for me is a little bit more of a in your face vehicle for me to talk more about money on a long term basis, like right now we talk we have allowance and we have a save, spend and gift, this is kind of in the next thing. So that is a powerful tool, but not necessarily not necessarily just you know, for the purpose of education. Now, the big thing with that is like when they go to spend that money, capital gains tax is going to be a big part of that. So you have to you know, and that’s the same thing with, you know, like a brokerage account, if you’re just managing that for your kids, but their kid’s name isn’t on there. The other one that a lot of people will use is the Roth IRA, because you can take out the basis, you know, tax free penalty free. So you could use a Roth IRA, again, you could use your own Roth IRA, if your kid has like income, you could set up their own Roth IRA. So there’s a little bit of nuance there in terms of how you how you use that. I know a lot of people will use a Roth IRA, just because they don’t like the restrictions of the 529 just being used for qualified education expenses. So that’s something that people could use, I don’t personally use that, like I feel very comfortable with a 529, I feel very comfortable that the it’ll continue to continue to expand in terms of what you can use it for. So that really leaves a 529 in terms of vehicle. So the 529, Tim, is it’s a think of it as like a retirement account, except for education. So you can put after tax dollars in there, it grows tax free, you might get a state income tax deduction, like I mentioned, you can get $4,000 per beneficiary per year per person per beneficiary, in the state of Ohio. Every state’s going to be different, some states don’t have anything, some states have very generous, all all 529s are not created equal. So like you’re just some of them are gonna be really great. We were actually looking at the expenses the other day, and we were surprised that Ohio is a little bit higher than we thought. So you have to be cognizant of that. So you put the money in there, it grows tax free. And then if it’s used for qualified education expenses, which is typically tuition, fees, books, supplies, equipment, room and board, computer or like peripheral equipment or software, internet, that can all be you know, kind of, you know, part of that distribution. So, just like in a in a retirement account, you are kind of saving for, you know, 18 years or 10 years depending when you start so you have that accumulation period, and then that the accumulation period typically in retirement might be 10, 20, 30 years as you know until you until you die if you’re it’s typically four six, maybe eight years depending on what your goal is, you know from from an undergrad to, you know, masters, etc. So, that’s the big thing you put the money in, you invest it, a lot of them have target date funds, a lot of them you can you know you can pay the S&P 500. They grow the that tax free. And again, just to kind of reiterate that is, you know, when you buy when I buy XYZ ETF for my daughter in her in her UTMA account, we buy it at 100 shares, or $100 per share when she goes, You know, when she’s 18. And she’s now cashing that out, maybe that portion of her investment is $400 per share, which is great. But we have to pay the $300 per share capital gains and is going to be long term capital gains on that gain that we have. In the education account that you don’t have that. So that’s one of the benefits along with the state. So the UTMA, and the Coverdale gives you in the brokerage account gives you more flexibility in terms of what you can use it on. But there’s tax consequences, that’s the string. And I feel comfortable Tim, and we can talk about that a little bit more that there are enough outs for me from a 529, you’ll feel comfortable, you know, put in a good amount of money and into that to you know, to have for education, expenses. And if Olivia doesn’t need it, maybe my next kid or even grandkids.

Tim Ulbrich  21:10

Let’s talk about that flexibility for a moment. Because I do think that that is the probably the number one objection. Right. And and, you know, you mentioned the tax differences for those who choose to stay in a savings, you know, UGMA, UTMA or another type of custodian brokerage account. So the way I think about the 529 is this is like a Roth for college, right? It’s after tax dollars going in, it has the potential to grow or lose, right? Anytime we talk about investments and we can lose, but growth, hopefully long term tax free, then we could pull it out use it for qualified educational expenses, which there’s been an expansion of over the last decade or so. And that’s what I want to talk about flexibility because I agree with you. I think there are several things that maybe in the sense of of 529s were more restrictive that they’ve expanded upon. So right you think about what is considered to be a qualified educational expense, that would be one area that comes to mind. The expansion several years ago to allow these to be used for K through 12 private education, that’s a second one I think about. And then more recently, would be the Roth conversion opportunities, which is the third one. So it feels like all signs are pointing in the direction of more flexibility, not less when it comes to the 529s. 

Tim Baker  22:22

I think I think eventually, one of the things that got kicked out, was at the very at the very last minute with the Secure Act 2.0 was like homeschooling like that’s not that’s not you can’t use funds for homeschooling. I do think that, you know, again, like when I started advising people on 529s is back in the day, like you couldn’t use a 529 dollars to buy like a laptop for college. Like that was a restrictive thing. And they’ve they’ve improved upon that. Right now, like before, you couldn’t pay if you had, if you had money in your 529, you couldn’t take that money out and pay off a student loan without a penalty. Yeah, they they changed that now, it’s still restrictive. Like, it’s, I think it’s a $10,000 maximum limit, which is silly, in my opinion, just just use that that’s what it’s for, is that kind of, you know, minimize education expenses, like pay off the loan. Yeah, to your point, the Roth was a big thing that they put in and, and there’s, there’s a lot of, there’s a lot of hoops you got to jump through it has to it has to be open for at least 15 years or longer before you can move those dollars from a 529 into a Roth, right? The last five years worth of contributions are ineligible, right. So like, if you’re, if you put that if you put dollars in at 18, you have to wait until you know they’re past 23 to move those dollars over and the maximum lifetime transfer to a beneficiary is capped at 35,000. Which again, I also think is silly. 

Tim Ulbrich  23:49

Might change. We’ll see. 

Tim Baker  23:50

Yeah. And I think they will, I think I think there’ll be again as as I think it’ll adapt it more as like, if higher education looks a lot different. I think they’ll adapt that. They’ve shown that they will be able to and again at the end at the end of the day for me, Tim, and again, not everyone’s going to think this. But like if my kids don’t need it. Like I’m going to cascade that down to Liam to Zoey and if Zoey doesn’t need it. I’ll probably just let it ride for a grandkid. Or, or grandkids. So to me like I don’t, I’m okay I’m okay with that. Like I don’t need I don’t need to go to like, you know, every kid equally or or even my kids can kind of go down a generation. Not everyone’s okay with that. I had a I had a couple last week, Tim, that we talked about education hadn’t started anything and right off the rip they’re like I don’t want to do a 529 and I said like keep your keep your mind open. And part of it is like the tax, part of it is like are you okay with you know, everyone’s everyone’s like, I don’t know if you know, my kids are going to college, you might be different. We’re just all that’s all like fair, right? So it’s yes, we’re you know, a lot of us are open needs, when they’re one they’re toddler, who knows what they’re gonna grow up to be? But for me, you know, I think and again, I’m not looking at 100% solution. So I don’t necessarily need hundreds of 1000s of dollars, like, you know, if I was doing 100% solution. So this is kind of I look at this as kind of a coupon, you know, for future spending from the from the aspect of college tuition.

Tim Ulbrich  25:23

Yeah, and I think too, the other scenario to consider is, you know, when you talk about keeping options open, it’s like, what is the worst case scenario? It’s a 10% penalty, right, when we look at non qualified withdrawals. And the other thing I would add to the discussion, which by the way, nobody wants to pay a 10% penalty. So let’s be clear. But I would add to the discussion that there has also been an expansion beyond the what we think of the traditional four year degree, right. Trade school, certificate programs, apprenticeships like so I think we’re, that’s another example, we talked about flexibility. And I think, you know, for a lot of people, it feels like in the circles of discussions we have with other families of age around our boys about higher education, it seems like the trades is coming up more and more, as there’s some clear demand and in certain areas. So again, keep the options open. And as you begin to think about what what this looks like for you and your family, certainly there are options out there. And if you do look at the five to nine, we’ve got a great resource on our on our blog, seven things to consider before starting a 529 plan. Or if you already have one open, it’s a good refresher. We’ll link to that blog on the show notes as well. Tim, let’s shift to part three, as I mentioned in the beginning of the show, I’m excited about this. We haven’t really talked about this at length beyond the educational part of where does kids college savings fit and the priority of investing? What are the options available? And part three here is all about how much is enough? Now, just like we talked about when it comes to saving for retirement, same question we got to answer here and shout out to you in the planning team, you’ve built a really cool resource and calculator that we use with our clients that we’ll talk through at a high level here to really answer this question of as I’m saving for my four boys. I’m not flying in the dark, hopefully, because we can put some assumptions in place and determine how much is enough based on those goals? And ultimately, am I on track? Am I not on track? And what should we be doing each and every month to get on track? If that’s the case of where we’re heading? So it feels like Tim, the first step in being able to answer this question of how much enough is to figure out what the goal is? What the goal is back back to the poll question. Right, we started the episode with is, what’s the plan? Is it cover all expenses? Is it a partial fund? Is it a no fund, which I guess we could end the episode right there if that’s the case. But if it’s a partial or full fund, at what level? And we’ll talk about the third, a third, a third rule here in a moment at what level the funding is to be desired, is an important assumption we have to make in these calculations, correct? 

Tim Baker  27:52

I mean, and again, I think a lot of people, it probably is, I’m trying to think, you know, of all the hundreds, if not 1000s, of meetings I’ve had with with clients and prospective clients over a lot of people are like, I don’t know, I want to save something. What is that? And there’s, there’s, there’s a little bit lack of like structure there. It’s rare, where people are, again, it’s going to be on the tails there where it’s like, I’m not worried about at all or like I want to do 100%. So I think in the absence of that structure, it’s just a conversation of like, okay, like, like, here’s a framework. And that’s what we talked about the 1/3 rule, here’s a framework does that sound like? Because the beauty of the 1/3 rule, or at least the way you think about it, is you’re talking about what can I do today, but then you’re also pushing it off to tomorrow, because part of like, your funding is going to come in like future earnings. But then also there is that skin in the game, which I love. I think having skin in the game with this decision to go to college is huge, or even like, you know, giving money to your kids for college is huge, because we’ve seen how wasteful is probably not the correct term, but like how wasteful it can be. When you’re looking at schools out of state, private, when you’re, you know, maybe jumping around in majors, I think having some type of you know, some type of realization that like, Hey, you’re going to be on the hook for some of this. And obviously, pharmacists know this very well, is needed. At least that’s the way that I look at it. So I think in the absence of any type of structure, I think introducing that 1/3 rule is important. 

Tim Ulbrich  29:32

Let’s talk about that rule because I think that if we use that as the baseline, you can adjust whatever you want, right? We’ll talk about the three buckets and we’re gonna assume a third, a third a third, but you know, it could be 40% 20% 40% Right. So once you understand the concept, I think from there you could determine Hey, do I like that? Do I not like that and what adjustments you want to make. So walk us through what that third rule is. 

Tim Baker  29:55

So off the rip, a lot of clients we like they look at the look like what their education costs. And they’re like, no, like, like, this is impossible. If I have a couple dollars, you know, that can, you know, rub together, that would be great. But when you kind of break it down, it’s, it’s not as bad as it as it looks. So like the 1/3 rule basically looks at, okay, when your child goes off to college, the sources of that a paying for college is going to really come from three places. A third of that a third of the of that is going to be come from, like, we say, past income or past savings. So today, in 2024, I’m saving out of my paycheck into my kids 529, and it’s going to grow. So that’s the 529. It could be a Coverdale it could be a Roth, you know, whatever it looks like but it’s, it’s you’re doing something today to spend in the future, just like we talked about with retirement savings. The other bucket the another third comes from what I would say current income. And again, this is this would actually be future income, but like when Olivia is 18, and she’s looking at colleges in, you know, eight years, I’m hopefully still working that YFP, I’m making money, and I’m part of the part of that tuition bill is going to come from the cheque that I’m receiving in eight years. And then the last bucket. And the last third would would be that skin in the game, it would be that outside outside funding, where this is going to be grants, scholarships. And last but not least, loans. So this is where you know, and again, we we talked about it with our kids that they’re going to have some money, but we don’t let them know what that is. My parents were like, you’re on your own. And then they helped us like later it was kind of like a surprise. So we kind of talked about it, but they don’t necessarily know what they’re getting. But that’s those are the three buckets. It’s what you’re you’re saving and investing for future college expenses. And then when your kid is in college, using your your part of your paycheck to pay for tuition. And then the last third coming from grants, scholarships, and student loans.

Tim Ulbrich  31:57

Tim, we’ve had several, I think, at least a couple I can think of episodes we featured where pharmacists have really worked, you know, throughout school, sometimes really aggressively to help pay down. Now, you know, if you’re working at $15-$20 bucks an hour, you can only make such a dent and a couple $100,000 of debt. But that has been a significant contributor to minimizing the debt that they’re having to borrow in any given semester. So in that case, when you think about a child working, would you put that in the final bucket? Or where how do you how do you think of that portion?

Tim Baker  32:33

I would put it in the in the final bucket. Again, I think it’s kind of like their skin in the game. It’s like, Hey, you could you could not be a great student and not get anything or you know, I know a lot of people, there’s money to be out there for you know, we just gave out our first scholarship, you know, obviously on the back end for YFP Gives. But there’s a lot of people that don’t take that, you know, go through that legwork. You know, Olivia’s goal, she wants to swim collegiately that’s her big thing right now. And she just missed her JO time yesterday by a couple of seconds. So she’s, she’s, she’s doing well. And again, I think for her, I think my wife would love it if she got a scholarship for that. But I’m like, you know, if happens, great. If it doesn’t, but to me, it’s a little bit of their, their participation in this whole process, because it is a lot of money. You know, when we look at the numbers we’ve go through, if we kind of go through this calculator, the numbers are staggering, right. And like I just said, like, when I was looking at it, you know, as we were jumping on here, the the four year instate for Olivia went up, you know, when I looked at it last month, and I guess they’re just refreshing their their numbers and then in the tool that I’m using, but you know it, these things go up. So I think having a plan in place is is is the way.

Tim Ulbrich  33:44

So with the third plan of the third rules, a framework of where we get started, obviously everyone can adjust that accordingly. Talk us through then the calculation and how we ultimately get to this point of Hey, are we on track? Are we not on track? Or what do we need to be doing each month to get on track? 

Tim Baker  34:04

So I’m using a combination of our financial planning tool called Right Capital and kind of a calculator I built. And part of it was because I wanted to kind of adapt it to the 1/3 role. So I rely on the calculator really for or the financial plans will really for the likely in the inputs I just, I just looked at so in the tool, you can say hey, I want to send my kid to a two year commuter, a four year in state, a four year out of state, four yearr private school, you can actually put in the school that you want or you can I think it’s hard unless you’re right right up against it. So we we put in a four year in state so like, hey, Ohio State’s right down the street, that would be great. So essentially like when I’m looking at Olivia so Olivia was born on Halloween of 2014. Today’s the 15th of July 2024. So her current age is 9.7 so she’s almost a 10 year old, I think she would say she’s, she is a 10 year old. So we’re saying that at 18, she’s gonna go to college. So what that leaves is essentially 8.3 years before she’s got to move out and get out, and I can turn her bedroom into a man cave. Which she doesn’t like that joke.

Tim Ulbrich  35:18

Second whiskey storage unit.

Tim Baker  35:20

Exactly, exactly. So 8.3 years is our accumulation. That’s what’s left of our accumulation. So we make some assumptions about asset allocation. So in my calculator, I put in like an 80%, equities, 20% in bonds right now, she’s all equities, we have a lot of time. But as we get closer, we’re going to be, you know, to avoid sequence risk we’re going to be more conservative when we get to that five ish years. So maybe when she’s 13, 14 15, that’s when we’ll start to really kind of get more conservative until we until we have to spend it. So I’m using kind of a blended, you know, she’s not, she’s not 100% equities the entire time. So I put 80/20, you know, we use, so that real rate of return is about 4.6%. So that’s kind of some of the, you know, if I change that to 90/10, or 70/30, it would change the calculus. So the input that I was changing, you know, that I was mentioning, when I looked at this last month, a four year in-state for her would be $183,653. 

Tim Ulbrich  36:26

With room and board?

Tim Baker  36:27

Yes. So that’s the need. So in what that means is in, I think right to the end, like today, it’s something like $28,000. But when they extrapolate that out 8.3 years in the future, that’s what’s going to cost that $28,000 With the inflation times four years. So that’s where we get the $183,000. So just as an example, my son, who is five years younger than Olivia, so Liam is five will be five next month already. His four year instate will be $234,393. So it goes from $183,600, to $234,400. Four, and then I don’t have Zoe’s calculated, but her four year end state is $284,900. So $100,000 difference between my oldest and my youngest, there’s essentially a 10 year gap for that between them. But that’s, that’s significant. And that’s why like, we’re hoping some of this changes. But that’s the number that I’m using, you know, to kind of say, Okay, this is what I this is what we need. So, if I were to fully fund it, if I needed to fully fund it, I would essentially need $183,000 in eight, eight years. Or you could say 12, and I’m still, you know, saving during that, but typically, that’s not how it works. So currently, currently, today, Olivia has, I guess it’s called a share. That’s right. So currently, Olivia has $28,629. So and we’re we we put in not quite the $4000, we put in $300 a month or $3,600 per year. So we’re on pace to save $103,000. So if you look at that, I need 183 we’re on pace to save $103k. So that our our percentage now was we’re on track to say 56% of her college. Now, that’s not 100%, which is not our goal, but it’s also a lot higher than the 33%. So like we there’s some delta there. So you know, so I kind of break down if we did want to pay 100% percent, you know, what we would need if we, for us to be on pace to save for 100%. To get to that $183k, I would need $67,634 today. I don’t have that I have $28,000. If I if I lost all the monies in her 529 today, I would essentially need to be saving or investing $1,260 for the next 8.3 years to get to that to get to that 183,000. So because I have that, it’s actually I need to increase my essentially increase my savings from $300 a month to $854 per month to get to that. Now obviously, that’s not something that we want to do. So and then I had the same thing broken down for the 1/3 rule. So 33% of 183,000 is $61,212. So again, when you break it down like that, I’m like that’s actually not that bad. $61,000, like that’s doable. Now, the conversation I had just had with Shay when I ran this was she’s like, well, we should should we start saving less and I’m like, essentially, like the argument could be you could save less or we could we could kind of stick to the status quo. My thought is is like that’s one less bill that I have to worry about in 8.3 years like it’s almost. so there’s a tricky one is correct. So like, I part of me is like, do I just get it too, and maybe we’ll talk about this in the next iteration. So like, do I go to 67%, you know, to get to my to like my two thirds of post and present income for that. And then she has a 1/3. So just to break down the math for 33%, I need $61,212. What you currently need today to be on pace would be I would need $8400 and I have $28,000. So we’re beating that. And then if I had $0, like, if I lost all that money, I would essentially need to be saving so $420. So if you have a 10 year old, and you want to send them to a four year in state and you haven’t saved anything, and you want to save at least a third, you would essentially need to be saving $428 per month, between now and when they go.

And then the last column is kind of the choose your own rule. So if I were to if I were to say, hey, Shay, like, let’s, let’s, you know, we have some room in our budget, you know, retirement looks good, etc. If I were to say, hey, let’s let’s go to that 67, that kind of checks off both for us, I would need $123,000.  I would need today $38,000. We don’t have $38,000, we have $28,000. So that lump sum to get us on track would be putting $9700 and I’m on track. And then we would essentially be needing to pay or invest $438 so I’d need to increase my monthly contribution by about $138. And then I go through the same thing with Liam. So Liam, just in broad strokes not to go through every every every calculation. He has, so his, what we need for him and for four year in state 13 years from now, since he’s five is $234,400 essentially. He has currently $13,800. We’re currently putting in $225. So not as per month, so not as much as Olivia. And then we’re on pace to save one, it will we’ll call it $109,000. So we’re 46% of the way there. We’re on track to be at $46, which is still beating our 33% roll. So we’re I look at this and we were in good shape. I think with Zoe, it’s too early to tell she only has a couple 100 bucks in hers. But that’s kind of the calculus that we’re doing from hey, are we on track or not from a from an education perspective. And again, like if the market if the market loses 30% today, Tim like right now it’s been on a bull market. But if loses 30%, and all of a sudden he doesn’t have $13,800, he has $10k, that changes thing. Right now, over the long period of time, we’re still assuming, you know, a nominal rate of return of 8.8%, which is an 80/20 portfolio, and then we adjusted down for inflation. So that’s kind of the math. I know, it’s kind of hard to follow over the podcast. But hopefully that made sense as I was going through the, the numbers line by line.

Tim Ulbrich  42:56

Yeah, what I love about it is it makes kids college savings much more practical. 

Tim Baker  43:01

And patatable, right? Like you hear those headlines. It’s just like your retirement. It’s like, you know, when I say to clients, it’s like, hey, you need $2 million to retire, you are looking at me like I have 2 million heads, but it’s a big number, way in the future. It’s the same thing holds true with education. It’s just, it feels more than what it actually is.

Tim Ulbrich  43:20

Yeah, makes it digestible with a third rule or some variation of that. I mean, it really it’s a compressed nest egg calculation.  And that’s what I love about it is we’re not flying in the dark. What what do we have saved right now? What’s the goal? We’re gonna put some assumptions in place just like we do with retirement planning. And then what do we need per month to achieve that goal. And that last part, is the piece that is so often missing when we talk about long term savings and investing, right? Whether it’s 10 years or 30 years, some of these numbers, as you mentioned, too, feel big, they feel overwhelming, they feel scary. And what we can relate to and put our arms around is what do we need to be doing per month? Or what is the goal? And then we can look at the rest of the plan, the budget all those things and figure out, can we make this happen? Or can we not make it happen? And then what does that mean, in terms of what they have saved? What does that mean for other financial goals? So yeah, I think if we think about it, in that sense, we really can start to implement this and put a game plan in place and make some adjustments if need be. And context matters, right. So I would think, how you think about this for Olivia versus your youngest, Zoe is very different, right? When you get to the potential for over saving with Olivia well, that’s different with your first and your third because option to transfer, so I think a lot of details to be considered as we look at the individual components of how you approach the 529. 

Tim Baker  44:39

I’ve really enjoyed you know, I’ve been trying to get Olivia kind of more interested in like money and the value of money and, you know, she told me the other day she’s like, you know, when I go back to school, can I buy these like $100 like Nike shoes and I’m like, No, you can’t like it’s like, we’ll spend some money and then you can save some with your money, and there’ll be a cap on what you can do. And even my wife said, like, oh, like she gets money, you know, should we put that in a 529? I’m like, I actually, like when we, when she does her allowance, I say like, Hey, any money that you want to put into your UTMA account, like, I’ll match it. So, and I did the same thing like she, she’s going to, she’s going to donate to YFP Gives. And I’ll match that, right? So I want to I want to incentivize that behavior. But I kind of want the 529 to be like, funded by me and mom, right. So like, I don’t want her spend money to go to the 529. So I’d rather have that money go into an UTMA that she can use it, she could use it for school, which she could use it for a car, a business, a gap year or whatever. But I’ve enjoyed kind of like having some of those conversations with her and kind of seeing some of the lights go on. In terms of like, investments and that’s the thing, like I’ve always struggled with like, should I kind of key them into like what we’re doing on the 529 or should be more of like, a mystery because I really don’t want her to like say like, oh, like mom and dad have it paid for like I don’t, you know, I don’t need to work. My mom took the opposite route. She’s like you have to work because we’re not going to help you at all. But I think I think these types of discussions with your kid, even when they’re young, like mine are is, is positive. And again, like, I grew up, we didn’t really talk about too much about money, like outside of like you’re on your own. But I think building some of those behaviors and kind of mindset around money is important because a lot of people that come through the door to work with us. They’re kind of an image of their parents, right. A lot of them is like, you know, if they had consumer debt issues, it’s probably because their parents did. If they were oversavers, its probably because their parents were. You know, some people look at the parents and say, I don’t want to be like that. And they’re trying to fix it, but like the natural inclination is to spend or save. So I think it’s a good opportunity to at least start the conversation around money with kids. 

Tim Ulbrich  46:58

Great stuff, Tim. And that’s a topic we’re gonna talk more about on the show. One because we haven’t talked about it enough. And two, we’re living it firsthand with our own kids. We’re excited to share that journey as well. Let me wrap up by saying for those that are listening, yes, talking about kids college, but also other parts of the financial plan, saving investing for the future, retirement planning, tax planning, debt pay down and so forth. We’ve got a team of certified financial planners, and Sean Richards, our CPA and tax professional that can help you in working one on one as it relates to your own financial plan. If you’re interested in learning more about the services, you can visit yourfinancialpharmacist.com. From there, you can book a discovery call with Tim to learn more about the services and determine whether or not they’re the right fit. Thanks so much for listening. If you’d like what you’ve heard on this episode, other episodes of the podcast please do us a favor and leave us a rating and review on Apple Podcasts or wherever you listen to the show. Have a great rest of your week. 

Tim Ulbrich  47:51

Before we wrap up today’s show, I want to again thank this week’s sponsor of the Your Finanicial Pharmacsit Podcast, First Horizon. We’re glad to have found a solution for pharmacists that are unable to save 20% for a down payment on a home. A lot of pharmacists in the YFP community have taken advantage of First Horizon’s pharmacist home loan, which requires a 3% 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  48:37

[DISCLAIMER] 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 podcasts. 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 yourfinancialservices.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 366: Your Medicare and Long-Term Care Questions Answered


Tim Baker, YFP Director of Financial Planning, breaks down Medicare and long-term care insurance and what to consider when deciding on a policy.

Episode Summary

Tim Baker, YFP Director of Financial Planning, breaks down the importance of long-term care insurance in retirement planning, highlighting the need to carefully consider the cost of these policies and how they fit into one’s overall financial plan. 

Tim also discusses Medicare parts A, B and D and the importance of understanding the enrollment period to avoid paying penalties.

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

  • Medicare and long-term care insurance with questions from the community. [0:00]
  • Long-term care insurance costs and factors that affect premiums. [4:10]
  • Long-term care insurance policies, including elimination periods and riders. [10:23]
  • Long-term care insurance policies and their importance in retirement planning. [17:28]
  • Medicare penalties for late enrollment, including Part A, B, and D. [23:15]
  • Medicare changes and penalties, with tips for avoiding them. [29:40]

Episode Highlights

“Start assessing what kind of policies you want and what you want to do and what your plan for long term care in your 50s. The sweet spot to purchase a policy is in that 55 to 65 year old range. If you’re too early, you’re paying premiums for a long time and you may not reap the benefit for 20 or 30 years. If you’re too late, you’re paying much more in premiums or you could even be denied. So unlike most health insurance, you can be denied for pre-existing conditions. There’s really that zone, that sweet spot – the Goldilocks zone where you really need to kind of get this just right.” – Tim Baker [4:32]

“A lot of people think you need a 100% solution to put my kids through college or you need 100% solution for this. It’s not about that. It’s really about providing a baseline benefit for you that you can then pull the levers on other parts of your financial plan to form a fully comprehensive plan with regard to long term care.” – Tim Baker [9:58]

“I think the main misconception about long term care is that Medicare is going to cover this and it really doesn’t.” – Tim Baker [23:51]

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. On this week’s episode, we take questions from the YFP community on Medicare and long term care insurance – two critical, yet often overlooked, and might I say boring, parts of the financial plan. We discussed when it makes sense to purchase Long Term Care Insurance, what policies typically cost penalties for late enrollment in Medicare and policy changes and trends for both long term care and Medicare that listeners should be aware of when planning for the future. Now as we crossed the midway point of the year, it’s a good time to check up on your financial progress for the year and dust off those goals that you set back at the turn of the new year, which perhaps feels like a distant memory at this point. Whether you’re focused on investing in the future, paying off debt, saving for kids college, or growing a business or side hustle, our team at YFP is ready to help. 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 our CPA work with pharmacists all across the US and help our clients set their future selves up for success while living a rich life today. You can learn more and book a free discovery call by visiting yourfinancialpharmacist.com. Again, that’s yourfinancialpharmacist.com. 

Tim Ulbrich  01:29

Tim, welcome back to the show.

Tim Baker  01:34

Good to be here, Tim. Let’s do this thing. 

Tim Ulbrich  01:36

All right. So at the time of this going live, we’re actually on our annual YFP mid year break, it’s a week that we take off every year as a team around the Fourth of July a week that we can pause, reflect, get some time with family and friends. So Tim, any any big plans for the family this year? 

Tim Baker  01:52

No, it’s interesting, Tim, I am reading Michael Hyatt’s Free to Focus and he’s like, the way to kind of become focused is to is to do less. So I think it’s a good time to kind of stop and reflect on you know, the the first part of the year and then think about, you know, what’s ahead for the second half of the year, we have some friends coming in town that have young kids, so we’ll be spending the Fourth with them, but kind of just staying home and hanging out. How about you? Any big any big plans for the Ulbrich family?

Tim Ulbrich  02:22

Yeah, we’re hitting the road. We’re going to see Jess has family up in Bowling Green, to do some fireworks, Fourth of July stuff, see her grandma, and then we’re making a trip to Buffalo. My brother and his wife put in a new pool. So we’re gonna we’re gonna enjoy that with them for a couple days and make make the most of the week. Boys are super excited, great, great age for traveling. And it should be. It should be a fun week. So hey, when you when you figure out the Free to Focus, let me know how that works. I need to figure that out. So the genesis for today’s episode is, Tim, you led a webinar for us a couple weeks ago on Medicare and long term care insurance. And you know, this is a topic that I think we often think about, of course, we know it’s important, but it’s one of those topics, both of these topics where we’re like, ah, kind of boring, like, how much do I have to really think about this part of the plan. But as you shared, I mean, the engagement, the questions, the interest was, even exceeded our expectations, which is great. And so we decided, hey, let’s do an episode that focuses specifically on the community members questions around Medicare and long term care. Now, we have talked about both of these topics on the show before. We’ll link to these in the show notes. Episode 329 I brought on Certified Insurance Counselor Josh Workman to talk about Medicare selection and optimization. He had some great insights to share from his experience helping people with Medicare selection. And then episode 296, Tim, you and I talked about five key decisions for long term care insurance. So we’re not going to rehash the background of these topics, make sure to go back and listen to those but rather jump into questions that our community had on these two topics. So, Tim, let’s start with long term care. First question, which is probably I think, the most common question, which is, when do I need this policy? Right. So what is the ideal age range to purchase a long term care policy? 

Tim Baker  04:15

And in the presentation that we did in early June, the I kind of talked about this as like the Goldilocks zone, right? So if you’re too early, it’s not great. If you’re too late, it’s not great. So the way that I have broken this out, Tim, is you start discussing this in your late 40s. Start assessing kind of policies and what you want and what you want to do and kind of what is your plan for long term care in your 50s and then really kind of get the sweet spot to purchase a policy is in that 55 to 65 year old range. If you’re too early, you’re paying premiums for a long time and you may not reap the benefit for 20 or 30 years. If you’re too late, you’re paying much more in premiums or you could even be denied. So unlike most health insurance, you can be denied for pre-existing conditions. So there’s really that, that zone, that sweet spot, so to speak, is the Goldilocks zone where you really need to kind of get this just right. And again, if you’re, you know, if you have chronic issues, maybe you do that earlier. But I think one of the questions we’ll talk about, what do these premiums look like, and I kind of have these different age bands, so we can kind of talk about that. But, you know, started discussing in your late in your late 40s, kind of start assessing, you know, your plan and 50s. And then and then have a policy that meets that plan, you know, in that 55 to 65 year range.

Tim Ulbrich  05:42

So, Tim, we’re officially in the decade, you said end of forties. So something we’ll be thinking about here in the not not too distant future, which is hard to believe. But let’s talk about costs, right? Because I think sometimes these policies certainly can have some sticker shock. Everyone’s situation, of course, is different. But what are we looking at in terms of average premiums of a standard long term care policy?

Tim Baker  06:06

Yeah, so before I get into that, like, I think one of the I think this was Lincoln Financial, you know, did it did a study that that showed, like, what couples are willing to spend on long term care insurance, I think, I think the number was like $2500 to $3,000 per year in premiums. So I had that in the back of my mind, as I was kind of researching, you know, this. So according to the 2023 Long Term Care Insurance Price Index, that’s put out by the American Association for long term care insurance,  AALTCI. General estimates, and this is for this is for a policy that has an initial benefit amount of $165,000, it grows at 3%, compound inflation. So that’s kind of the general baseline. At age 55, for a single male individual, those premiums range from $1700 to $2,100 per year. So obviously, you’re in that that range of $2500 to $3000. Single females, unfortunately, ladies, your premium jumped quite a bit, you tend to live longer than men. Single female, it’s actually $2675 to $3,600. And then a shared benefit, so a couple that kind of combines their benefit together is is $3,000 to $4,800. So that’s at age 55. It jumps age 60, for a single male goes from $2100 to $3000. So that’s up from $1700 from $2100, single female jumps from $2675 to $3600, to $5000. And then the couple $3800 to $5500 combined. And then lastly, it’s 65, single male $2600 to $3135. So that’s a jump from the $2100 to $3000, single male $4230 to $5265, and then the couple $5815 to $7150. So, and I would say, Tim, that the factors are influencing these premiums, the probably the big one here is going to be the inflation protection. So it’s probably the most the most expensive rider that’s out there. And if you actually tie it, I don’t even know if they sell them. I don’t think they sound like this. But they’re they’ve been insurance products in the past to actually tie it to the CPI. I think they don’t necessarily do that. It’s like how you pick a 1% 2% 3% 4%. That’s going to drive the biggest cost to the to the you know, to the premium. Age of purchase, obviously, as we kind of outlined here is a big factor your health so health are healthier individuals will qualify for better rates, the benefit amount and duration. So a highly highly daily benefit or a bigger benefit pool. And a longer, you know, longer period won’t increase your premiums, elimination periods. Will I think it talks about this another in another question, the shorter the elimination periods and think about this as a time deductible or a deductive deductible that’s in time, results in higher premiums. I mentioned the inflation protection and then additional riders so, you know, other things that could be outside of inflation, shared care will increase the cost. So these are kind of the factors but you know, I think almost all being equal, you know, if we were to strip away the 3%, which again, that’s a major rider, I think they’d become a little bit more affordable. And I think if you’re looking at a baseline policy that that will allow you to age in place, meaning like age in your home as long as humanly possible. I think if you can look at these policies almost as like a coupon for that care. Not that you know, we talked about this. A lot of people think like oh, I need 100% solution to put my kids through college or I need 100% solution for this. It’s not about that it’s really about providing a baseline benefit for you that you can then pull the levers on other parts of your financial plan other other, you know, assets that you have to then, you know, form a fully comprehensive plan with regard to long term care.

Tim Ulbrich  10:22

Yeah. And Tim, as you share that, it reminded me of bringing Cameron Huddleston, on the show who wrote mom and dad, we need to talk we had her on episode 321. Navigating some of those financial conversations with aging parents, and some listening might might be thinking about this as the coverage for themselves. Some listening might be thinking about this as, hey, what about my parents, right, that are aging? What what do they have in place, and obviously, there can be a direct line from their coverage or lack thereof and their own financial plan. And so, you know, when you’re talking about the different factors that can affect the cost to me, but I also hear in there is like, we’ve got to zoom out and understand, like, what are the desires and the needs? What what is the goal in terms of long term care, obviously, things may happen or not as we would like them to happen. But having some clarity on you mentioned, like care in the home versus a facility type of care, like, those conversations are going to be really important for us to think about individually, but also with our parents to then look at some of these policies and determine, you know, what we want these policies to be doing in the coverage.

Tim Baker  11:25

Right. Yep, exactly, right.

Tim Ulbrich  11:28

You mentioned riders a couple times before we go to the next question. Can you can you just define that for those that may that may be a new term as they’re looking at insurance policies?

Tim Baker  11:37

Yes, riders are things that they’re like, the kind of like, add on features. So when an insurance writer, you know, wanting like, like for a life insurance policy, a permanent policy, or a disability policy could be like a waiver of premium. So like, if you have if you’re deemed disabled, you could put a rider in that policy that basically says, if you are disabled, the policy will remain remain in force, however, you don’t have to pay the premium. For for the what we’re talking about is cost of living. As you know, things increase every year and inflation goes up, the policy kind of keeps pace with inflation, or at least there’s a flat rate. So all a writer is is a additional feature that’s bolted onto the policy that makes it more enticing to the policyholder holder. However, it often comes with expense, you know, it comes with an additional premium that’s tied to that. So that’s all rider is.

Tim Ulbrich  12:43

Great stuff. So we talked about what’s the ideal age range, we’ve talked about the average premiums, what goes into that costs, several different factors. You mentioned, some of those riders, age of purchase health, what the actual policy entails elimination period. Let’s talk about elimination period. That was one of the other questions that came through is, you know, is there an elimination period with a long term care policy similar to what folks might be familiar with with a long term disability policy? So if you could first define elimination period? And then answer that question?

Tim Ulbrich  13:11

Tim, as you’re sharing all of these nuances and details regarding long term care insurance policies, you know, as can be the case with buying insurance, right, you pull back the onion. And there’s another question to consider, another question to consider what the policy should be made up of which all informs the cost, right? And what we have to answer the question when it comes to insurance, whether it’s long term care, or long term disability life, whatever we’re talking about is, what do we need? And what do we not need? Right, because obviously, we want to have a certain level of protection, that’s going to protect the rest of our financial plan. But we also don’t want to be overspending on premiums so there’s an opportunity cost that those dollars can be used elsewhere in the financial plan. And I think this is important point to selfishly plug, the work that we do and other fee-only financial planners were when you’re engaging in that work in a fee-only relationship, meaning that you’re paying the advisor for the advice that they’re giving. And there’s not a compensation stream coming from the recommending of products that may or may not be in your best interests, we really can sit down and have these conversations of what do you need, what you not need, without there being a bias in the advice that’s been given. So important.

Tim Baker  13:11

Yeah, so the elimination period, as I mentioned, is kind of like, think of this as like, when you get in a car accident, and you are, so your deductible is $500, or $1,000. You have to pay that, you know, as part to kind of access the policies policy. So if I have a, you know, an accident, and I need work on my car, that cost, you know, $2000, for that, for the policy to pay out that $2000, I have to actually pony up the deductible, which is, you know, 500, or whatever it is. So it’s it kind of what it what it what it’s meant to do is create somewhat of a barrier to care, they don’t want these policies don’t want to be accessed or have claims against if they’re if they’re nominal or minimal. So in a long term care insurance policy, you pay that in time. So to back up, when we talked about when you know, the process of purchase and long term care, I kind of broke this up into five steps, it’s actually deciding when to purchase a policy which we talked about, it’s to choose kind of a monthly benefit. The third one is a truce of deductible, which I’ll break down here in a second and then four and five is that decide how long the benefit will be paid. And then the fifth one is decide, you know, what is what riders you want? Do you want an inflation rider or not? So, to go back to step three of choose a deductible, deductibles come kind of in all shapes and sizes. So in terms of a time you can get a deductible, that is, you know, the elimination period I should say that the deductible and time that is 30, 60, 90, 180 or 365 days out. The most common is 90. So the idea behind this is, once once a professional physician says, you know, Hey, Tim, you need help with assisted daily living, like the task of transferring or eating or whatever, then that’s when the clock starts. So if I have a 90 day elimination period, and the doctor determines that July one, then essentially on October one, and sometimes it takes another month to actually get the benefit, you know, October one or November one, that’s when actually the policy starts to pay out. Now, what I just described was a calendar based a calendar day elimination period, there’s really two types, there’s calendar day. And then there’s service day. So the calendar day is based on the total number of days from the start of needing care, i.e. that physician says, hey, Tim, you need care, regardless of how often you use services, as opposed to a service day elimination period, which is based on the actual number of days he received paid care. So think about when you think about long term care, it’s often intermittent care, you don’t have someone around the clock, maybe they come in, you know, three days a week to clean and help you do some things around the house. So there’s pros and cons on each on each, right. So if you have a service day, service day care, if you have a 90 day service day elimination period, and you receive care three times a week, it would take approximately 30 weeks to meet the 90 day. So we’re versus like, if you have you know, on that first example, July one, I need care, you know, October 1, I’m getting, you know, I’m getting my policy to pay. So, you know, there’s pros and cons of each, you know, typically the calendar days going to be more expensive than the service day. You know, if you if you only need intermittent care, and it’s it’s maybe even less than, you know, weekly, you need it, you know, once a week or whatever it is, and the maybe the service day, you know, works. So this, these these elimination periods is all about trying to find, again, the Goldilocks zone for what type of care you need, what you what you want to pay for your policy, and then adjusting it for that. So that’s the elimination period, Tim. So again, most common is the 90 day. I think, I’m not sure what is more common between service and calendar day, I think if you want more of a known timeline, then calendar is kind of what you want. But then, you know, again, that’s probably going to be more expensive when it comes to paying the premium. That you have the the overlap between advice and the sale of a product, there’s going to be a conflict of interest, because often often that sale of a product, you know, means there’s a commission that’s in place. And yeah, and I’ll bring up one of the things. You know, I feel like when I was presenting, you know, I think the the latest data says that a couple, a couple that’s age, age 65, see if I can bring up the number. A couple that’s a retired couple age 65 can expect to spend after tax $315,000 on health care and medical expenses during retirement.

Tim Ulbrich  19:14

After tax. 

Tim Baker  19:15

Right. So and I think you might look at that be like, Oh, that’s not that bad. But like, a lot of people I look at that. I’m like, that’s a that’s a significant chunk of my, you know, traditional, like portfolio. Right? So and then the thing with this is that, you know, the last time I looked at this a year or two ago, like these numbers, they’ve jumped significantly. So, I think again, you know, if you’re and this is like if you think about like the biggest cost in retirement is really not like health care and medical expenses, it’s housing. So you know, if you think about this plus housing and that’s a significant chunk of a lot of people’s, you know, retirement nest eggs. So the the idea of behind, you know, long term care is to provide a baseline, again, you know, simple math, you know, you could spend $3,000 for 30 years and you know, spend, you know, $90 grand and give you that baseline, and again, you know, it can change. But to me, it’s about, again, getting those products in place for the plan that you’re trying to design without kind of some of those strings that you mentioned that are attached to that. So. Yeah. 

Tim Ulbrich  20:27

Yeah, this is you’re talking, it’s all good reminder for me, you know, my conversation with my parents. We’ve had an open conversation. I know they have a long term care policy, I don’t know the nuances of the policy. I know they’ve been diligent in that work. I know, it’s something they’ve talked about, they’ve they worked through intensely. But obviously, the the next level of that is to really ensure that my brother and I have a understanding of what’s there as well. Before we move on to Medicare, last question, related to long term care is, are there any recent policy changes or trends in long term care insurance that our listeners should be aware of when planning for their future?

Tim Baker  21:06

Yeah, I kind of see three, the big one I mentioned already, is, I think there’s a big push towards the aging in place initiatives, the the longevity of a person of a patient increases, when they can age in their home for as long as possible. And actually, a lot of these policies, Tim, are really designed to provide as much care and benefits to do that. So whether that’s setting up things like ramps or handrails or modifying the home to make it better, to, you know, again, have more of a focus on in home care than in a facility, once you pivot to a facility. You know, it’s it’s, it’s, it’s better for you to stay in home as long as possible. So there’s, there’s a growing focus on aging in place programs. And also that include kind of like wellness interventions like home modifications, and, you know, use of technology to monitor health and provide care remotely, so kind of more of a telehealth type of stuff. The second one is shift into more like hybrid policy. So there’s an increase in preference for hybrid long term care policies, which are often combining long term care benefits with life insurance or annuities. So, you know, if you were to decide to peel off, you know, a couple $100,000, a quarter million dollars of your, of your retirement portfolio to create a baseline floor, so you know, what you get for security plus, what this annuity pays you for the rest of your life, there’s, there are riders that you can put in that also provides long term care. So these policies policies offer more flexibility. And it’s, it’s, it’s less about, like, a lot of people with really annuities and long-cares, like, you know, you kind of lose it if you don’t use it, right. So making them more attractive to consumers, compared to kind of a traditional policy. Right. So that’s, that’s, that’s another one is kind of that hybrid approach. And then the third one, is, we’re starting to see more chatter and action initiatives for public long term care programs. So states, like Washington have introduced public programs, called Washington’s called the Washington Cares Fund, which began payroll contributions in July of 2023. And the basically what they’re trying to do is provide basic long term care benefits to residents. So they have something in place, because I think the the main misconception about long term care is that Medicare is going to cover this and it really doesn’t. So I think certain certain state governments are looking at this as a way to set aside money for residents to have some type of benefit in place for the purpose of providing, you know, long term care.

Tim Ulbrich  24:15

Great stuff, Tim. A topic, we’re going to continue to come back to, as I know, there’s lots of questions out there from the community. And since you mentioned annuities in that second update, and you know, we’ve talked before about that concept of creating a retirement paycheck, creating a floor between social security and annuities, whether or not that’s the right fit is another discussion, but we did talk about annuities on episode 305. Understanding annuities, we did a primer for pharmacists. So if folks are hearing that are like, oh, I want to want to learn more. We’ve covered that before we’ll link to that in the show notes. Tim, let’s shift gears to talk about Medicare. And again, we’ve discussed this briefly on the show before, Episode 329 with Medicare selection and optimization. Many pharmacists are aware of the different parts of Medicare from the work that they do every day. So let’s jump into some specific questions. The first one being for Medicare Part D, is there, (D as in dog), is there a penalty if you delay applying?

Tim Baker  25:14

Yeah, so so Medicare Part D is for a prescription drug plan. So yes, there is a penalty if you delay enrolling in Medicare Part D, the late enrollment penalty is an additional amount added to your Part D premium. And it’s calculated based on the length of time you went without Part D. The big thing here, Tim, is that it’s permanent. So once that penalty hits, it’s gonna hit as long as you have a Part D. So the way they calculate it, this, it’s 1% of the national base premium beneficiary premium for each full month, you went without coverage. So, and this goes up and changes every year. So as an example, the in 2023, the National base beneficiary premium was $32.74. So it’s not a ton of money. 1% of that is 33 cents. But you know, if you miss three months, that’s a whole whole dollar that you’re permanently paying on top of that. So it adds up, it’s one of those things that you don’t want to miss. So this is again, if you if you forego enrolling in Part D, you want to make sure that you do that when you’re you know, general enrollment comes up. So that’s that’s the penalty for part D. 

Tim Ulbrich  26:29

I think getting out in front of this, I’ve observed this time with my father-in-law and in my conversations with Josh, that we had on the show, Episode 329. This is just a big decision. You mentioned the permanent penalty, but also, this is people getting flooded with all types of information. Right? You know, I think there can be a paralysis just with the overwhelming amount of information. So starting this process early, making sure you’re doing research working with professionals that really understand this and have your best interests in mind is, is huge. The second question is what are the potential penalties for late enrollment in Medicare Part A, B, and D, we talked about D already. And are there any exceptions or circumstances where these penalties can be waived?

Tim Baker  27:09

Yeah, so so for Part A, most people don’t pay a premium for Part A, that’s kind of what your, you know, your payroll taxes already where you pay into Medicare while you’re working. However, some people do, do and if that’s the case, you have a monthly premium that may go up by by 10%. And you have to pay the higher premium for twice the number of years, you could have had Part A but you didn’t sign up. So again, most people, they’re going to, they’re going to dodge this because they’re not going to pay a premium for Part B. Again, just like Part D is that there is a penalty, and it’s permanent. So if you don’t sign up for Part B when you’re eligible. So this is your Part A is your hospital insurance, Part B is kind of easier is your outpatient, the penalty is added to your monthly Part B. So you calculate the this by looking at the penalty is 10% of the standard Part B premium. And I think in 2023, that premium was essentially $165, $164.90. So 10% of that, that that can add up, right. So and then the duration, you have to pay this penalty for as long as you have Part B the penalty is permanent and will be added to your premium. So if you delayed signing up for Part B for two years, your penalty would have been 20%- two years times to 10% of the standard premium. So in this example, your monthly premium would be a penalty, it would have been $164.90. But then, because you waited two years, the new premium is $197.88 cents. So more dire than prescription higher premiums, probably more punitive penalty. So this is really important as you are approaching your window. So just a reminder, you know your window, it’s the month before and after your eligibility date, so I should have this here. Here we go. So individuals that age 65, it’s a seven month period. So it’s three months before you turn age 65. The month you turn 65 and then three months after you turn 65 is your general or is your initial enrollment period. And that’s where you really want to make sure that you enroll in A, B and D at a minimum to avoid the penalties.

Tim Ulbrich  29:40

Great stuff there. Last question we have on Medicare, same one we heard on the long term care insurance side. Are there any recent policy changes or trends in Medicare that individuals should be aware of when planning for the future? And I guess we should say as we talked today, there’s a presidential debate tonight. I’m guessing this will become a topic in the presidential elections as it often is. So some of that will be hearsay, but anything that has been solidified or any changes that folks should be aware of?

Tim Baker  30:07

Yeah, and I’m going to answer this, Tim. And I want to go back to some of the exceptions that I didn’t answer for the question before. So the really the only things that I’m seeing for part D in for Medicare is related to part D. So starting this year, the 5% co-insurance requirement for Medicare Part D enrollees will be eliminated. So, I think what they’re what they’re trying to do is, is really go after high cost medications. So this is meant to reduce out of pocket. Beginning in 2025, though, there’ll be a $2000 annual out of pocket spending cap for part D, which will also provide significant savings with regard to high prescription drug costs. And then the two other trends that I’m seeing, is ones around consumer protection. So they really want the government really wants to kind of crack down on deceptive marketing practices. And so they don’t, they don’t want you know, companies that, you know, talk about these plans to kind of mentioned specific plans, and more oversight for like agent and broker monitoring to kind of, to kind of reduce predatory behavior. So kind of, you know, they want to prevent seniors from being pushed into a plan that they don’t necessarily want or need. And then the expansion of telehealth and digital health education is another thing in Medicare that they’re trying to, to focus on. To go back to the second part of the question that I didn’t answer, where the penalties can be waived. There are certain circumstances where the penalties can be waived. So if you are if you or your spouse are still working, and you have health care coverage through your employer, you can sign up for Part A during a special enrollment period without a penalty. And the special enrollment period typically lasts for eight months, after employment ends, or the group health coverage ends, whichever happens first. For part B, it’s the same thing. If you have, you know, coverage through an employer, that that can be, you know, something that, you know, avoids the penalty. And then Part D, if you have if you have like, coverage through your employer or TRICARE, or you’re a veteran, that, that that will waive the penalty. And then if you are in a disaster zone, like a disaster, like they’ll give you like a waiver for the penalty, if you can kind of prove that you were there or the extra help. It’s kind of a low income subsidy. If you didn’t sign up for Medicare, that’s another waiver. But you know, typically, outside of those, you’re gonna you’re gonna see that penalty. So that the kind of round out that second question there, Tim.

Tim Ulbrich  32:49

Great stuff. Tim. Lots of questions and engagement from the community on this topic. Be on the lookout – we have more webinars coming throughout the year, you can always find information on our website, yourfinancialpharmacist.com. If you’re subscribed to our newsletter, you’ll get updates there as well. We’d love to have you attend one of our future webinars covering a wide array of different financial topics for pharmacists at all stages of the career. And if you have a question on these two topics or another question, feel free to send us an email [email protected]. Again, [email protected]. And we’ll try to tackle that on an upcoming episode of the podcast. Now as we cross the midway point of the year, it’s a great time to check up on your financial progress for the year and dust off some of those goals that you set back at the turn of the new year. If you’re like me that perhaps feels like a distant memory at this point in the year. Whether you’re focused on long term care insurance and Medicare like we talked about today, or investing for the future paying off debt saving for kids college growing a business or side hustle. Our team at YFP is ready to help. 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. You can learn more and book a free discovery call with Tim Baker by visiting yourfinancialpharmacist.com. Again, that’s yourfinancialpharmacist.com. Tim, great stuff. We’ll be again back again next week.

Tim Baker  34:12

Yeah, sounds good.

Tim Ulbrich  34:16

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 analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted and constitute your permits as of the date published. Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacists Podcast. Have a great rest of your week.

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YFP 365: Millionaire Theme Hour: From $0 to 7 Figure Pharmacist with Mike Byers


Mike Byers, PharmD shares how he was able to achieve financial freedom and replace his retail pharmacist income through savings and real estate investments.

Episode Summary

In this episode, Michael Byers, PharmD shares how he was able to achieve financial freedom and step away from his job as a retail pharmacist at age 42. Mike outlines how he went from a position of financial weakness to a position of financial strength through frugality and real estate investing. A father of two young boys, Mike talks about the importance of having options and flexibility in this season as he and his wife raise their family.

About Today’s Guest

Mike Byers is a 2008 graduate of the University of Pittsburgh School of Pharmacy. He spent 16 years as a retail pharmacist for Giant Eagle where he worked as a staff pharmacist, a pharmacy team leader and a floater. After successfully investing in real estate for over 10 years, Mike decided to take a break from pharmacy in 2023 to spend time with his wife and two young boys. He loves his family, houses, outdoor adventure, and trying to find the right balance between YOLO and delayed gratification.  He can be found on Instagram @DIYrentalGuy.

Key Points from the Episode

  • Pharmacist’s financial journey to seven figures, early retirement, and mindset shifts. [0:00]
  • Financial journey after graduation, including materialism, divorce, and saving for retirement. [5:59]
  • Saving money, investing, and finding balance in life. [13:58]
  • Real estate investing, personal growth, and overcoming setbacks. [23:17]
  • Building wealth through real estate investing and managing cash flow. [28:54]
  • Financial independence, real estate investing, and career development. [33:12]

Episode Highlights

“You have to be honest with yourself and say, what am I doing now? What is the result going to be? If I’m saving so much that it’s driving me crazy, the result is you’re going to go crazy. But for me, the end result was adventure.” – Mike Byers [20:51]

“I mean, just because you go down a path of a certain savings rate doesn’t mean you have to stay there, you can make adjustments.” – Mike Byers [21:41]

“What I’m looking at is that I have this money saved because I was diligent in being able to save, what does the next 10 years look like? Am I going to sacrifice weekends with my family and nights in order to have one or two extra million dollars?” – Mike Byers [32:07]

“And that’s something that you think about when you turn a certain age and you start wondering how much more do I really need to be comfortable after 65. I don’t want to be self-insuring myself if there’s an insurance product or an annuity that you can buy that would serve that same purpose.” – Mike Byers [32:52]

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 episode we have a millionaire theme hour featuring Mike a 42 year old retired work optional pharmacist living in Pittsburgh, Pennsylvania. We discuss the highs and lows of his journey as he looks back, including how he felt trapped by big fixed expenses as a new graduate, why his early savings paid off big 20 years later, how his mindset shifted over time, why his real estate investing played an important role in his journey, ultimately replacing his pharmacist income, and why patience and short term frugality and sacrifice were key ingredients to his success. 

Tim Ulbrich  00:41

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. And we’ll hear that on today’s episode. Yes, you’ve worked hard to get where you are, yes, you’re earning to get income. But if 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 like moving, having a child, 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? The answer may be that your six figure income is not a financial plan. Yes, as a pharmacist, you have an incredible tool in your toolbox and that’s your salary. But without a vision and an intentional 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 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 United States and helps our clients set their future selves up for success. While living a rich life today. You can learn more and book a free discovery call by visiting yourfinancialpharmacist.com/learn. Again, that’s yourfinancialpharmacist.com/learn. Alright, let’s jump into my interview with Mike. 

Tim Ulbrich  02:11

Mike, welcome to the show.

Mike Byers  02:13

Hey, I’m happy to be here.

Tim Ulbrich  02:14

Before we jump into your financial journey and the path of becoming a seven figure pharmacist, tell us more about your career in pharmacy. What led you into the profession? Where do you go to school? When did you graduate and the type that you have work you’ve been doing since? 

Mike Byers  02:28

I think I started off like most folks going from high school to college, I went to the University of Pittsburgh. I started there. And of course, I was thinking about medicine, dentistry, pharmacy as my options and I was thinking about the path to get there. I don’t quite know what I wanted to do. My life kind of hit a roadblock sophomore year, I have a condition called ulcerative colitis. And I had to drop out of school at that time. And for a semester I was in the hospital for 16 days. And after the end of it and being in the hospital and experiencing things firsthand, I said, I think being a doctor is too hard for me. I think it’s it’s just not in the cards for what I have going on. And I didn’t know at the time that this disease wouldn’t be a huge part of my life. I found medicines over the years to control things. But I was also still dating my high school sweetheart at the time. And oddly enough, her father was a pharmacist. He owned an independent pharmacy. And I thought why not. So I finished my undergrad, I got a degree in economics and also a minor in engineering. And I went to pharmacy school from there.

Tim Ulbrich  03:54

And after graduation, those that are native to your area or where I lived for 10 plus years in Northeast Ohio, they’ll recognize the name Giant Eagle, but others will not. So tell us more about the work that you’ve been doing with Giant Eagle after graduation. 

Mike Byers  04:09

Sure. So that was an exciting time to be in pharmacy school. I mean, you were going to school, you were learning things that were helping people and developing these skills and it was very fulfilling and the whole time, salaries were going up and you hear you would hear interesting things like the Alaska deal and all the things you’ve probably heard about it that time. But I did graduate and I worked for Giant Eagle. I was an intern there and stayed on as a staff pharmacist. I had some experience leading three different stores, which I learned a ton from and I was also floater and then staff again. So it was about 20 years from the time that I signed on as an intern to last year when I did resign.

Tim Ulbrich  04:59

Mike is a fellow 2008 grad. I graduated from Ohio Northern, I remember those times, right? It was the sign-on bonuses with the cars and classmates showing up with new cars in the parking lot and the Alaska deal, which I never saw on paper, but I heard of it as well. So we’ll share with our listeners, what is that all about? What I remember if it was, it was a big retail pharmacy chain that was offering a three year deal in Alaska for a million dollars. That’s what I remember the deal. 

Mike Byers  05:28

The only thing I remember is sitting in class and hearing somebody turn around in their seat and say, I heard this. I heard a million dollars, three years. I’m gonna do it. And then I’m going to retire. Yeah, so maybe that planted the seed for some kind of early retirement financial independence at that point. 

Tim Ulbrich  05:46

Nonetheless, it’s a very different time right here in 2024. So we’re going to dig into your current state of being a seven figure pharmacist achievement, financial independence, getting to this point of being work optional. We’ll talk about how you did that, and how real estate and traditional investments played into that. But I want to go all the way back to 2008 when you graduated with a net worth of zero, clean slate, no mounds of student loan debt, right, our listeners today are graduating $150k, $200k, you know, smaller debt loads, some might look at that and say, Hey, net worth, is your graduation, smooth sailing, but not so fast. Right? Tell us more.

Mike Byers  06:23

Yeah, before you throw tomatoes at the podcast, I did have a little bit of student debt. Which it was I mean, the difference between what I was making what I was spending, I can’t even remember how I paid it off. It was about $20,000. But I did go through a divorce, which cost some money, and I did have a real estate deal go south where I lost a lot of money. So I have had to dig myself out several times since 2008. But yes, I did. I did graduate with roughly a clean slate. And worked my way up to now where my passive income through real estate pretty much replaces my salary at 30 hours a week as a pharmacist.

Tim Ulbrich  07:13

What were some of the decisions, and we’ll dig deeper as we go throughout. But what were some of the decisions that you made early on as a new practitioner, you know, as it relates to car purchases and other things. You know, one of the things you shared with me prior to recording was that quote, “I became obnoxiously materialistic, which I partly blame for my marriage falling apart.” What do you mean by that? And how did this ultimately, you know, play into not only the financial plan, obviously the relationship but what would be the beginning of of, you know, that trench that you would eventually dig yourself out of.

Mike Byers  07:44

So like, like we mentioned, it was exciting times to graduate with bonuses. And we I graduated and I was married, we got married the last year of school during rotations. And we were living in her parent’s basement, not because we needed to financially, but because we weren’t sure where we were going to end up for her job. But I bought an Audi. A luxurious Audi. While it wasn’t even three months after I graduated, still living in my in-laws basement, bought this fancy new car. And it just seemed like the thing I was supposed to do. Long story short, I mean, we eventually moved. She got a job north of the city, we moved into a nice townhome rental. Not much longer after that, I’m on Zillow shopping for a nice, big, fancy house. So the fancy house came not much long after that. And I did become obnoxiously materialistic. And it wasn’t long after I moved into that house where I saw the house on the next street. He said, Gee, I wonder when or what it would take to get that bigger house. And that was just the way I was operating and had we not gotten divorced, I could still be operating that way. But it was just a mindset where I blame being really materialistic 10%. 90% we were young and ultimately not right for each other. But it wasn’t much longer after living in that house a couple of years where the bomb went off and divorced, trying to pick up the pieces again.

Tim Ulbrich  09:34

So you don’t go from that point to becoming a seven figure pharmacist by continuing that mindset and continuing those behaviors. So something shifted, something happened from a mindset and a behavior perspective. It sounds like that was the divorce. Tell us more about that.

Mike Byers  09:50

It absolutely was. I realized that I didn’t need a big house and a fancy car to be happy. I said the exact opposite – how little can I survive on? Or how little can I have material wise in order to live a happy life and I somehow found a studio apartment in the city, it was 350ish square feet. When my mom first saw it the first time, took her breath away, because it was just that small – the bedroom was in the kitchen. Yeah. And those were those were happy times. I lived that way for a couple years. And it felt really comfortable. But I still wasn’t saving. A couple years goes by and I’m like, well, kind of on this path where my rent is relatively cheap, my salary is relatively high. Why don’t I have a savings goal? Because I didn’t feel like I was doing the right thing at the time. So my goal that year, I think this was about 2012. So a couple years after divorce four years after graduating, I decided I wanted to save in addition to 401k, I wanted to save $2,000 a month. And each month I would play the game, if I wanted to buy something I worked extra. If it looked like I wasn’t going to hit my goal I cut back. And that’s what I did for that year to in addition to maxing out 401k to build up some cash savings.

Tim Ulbrich  10:11

So if I’m following correctly from jump street, you’re maxing out your 401k. So you’re leveraging the tax advantage account. And then you hit this point, shortly after the divorce four years into your pharmacy career. You’re in this studio apartment 350 square feet, and you realize, Hey, I’ve got an opportunity to more aggressively save. And so you set this target, which you know, to be on, I mean, $2,000 as a percentage of one’s take home pay, that’s a big chunk of money. And you see this a lot in the financial independence, retire early the FIRE community where there’s very aggressive savings rates, right, you’re in your early 40s. So to get to a net worth of seven figure plus, it’s going to take a substantial amount of savings to do that at an early age. So did your savings rate stay there? What did the trajectory look like as you were building that over time?

Mike Byers  12:21

So I hit that number, okay. And I was able to save about $25,000 that year. So I built up my cash savings. When I after going through the divorce, I didn’t have that cash savings. And I built that up and again, I kind of felt comfortable like, Hey, I hit that goal for that year, and I got a new apartment, that apartment had one bedroom. Not necessarily more happy in that apartment, but it was more expensive. And it seemed nicer. So at that point, it was a little more rent, and I wasn’t saving money and about a year had gone by and I said to myself, What am I what am I doing now? I mean, I had this surplus, and I was on a good path. So I for whatever reason started Googling. I figured it was taxes. I said I typed into Google, “single high earner how to save on taxes.” Okay, so real estate comes up. And I’d always been interested in homes. I love home remodeling and you know, watching a little bit too much HGTV at the time. But the next day, my friend came over to watch a football game. Oddly enough, he says my mom was thinking about selling the duplex. I had known him in college. And my ears perked up because why not? So, long story short, I fell ass backwards into owning a duplex. 

Tim Ulbrich  13:58

Little house hack. 

Mike Byers  13:59

Yeah. House hack. Yeah. 

Tim Ulbrich  14:01

How did  that one work out? Tell us about that is an investment property?

Mike Byers  14:06

I mean, it was it was a huge learning curve. So I said yes. I said I contacted his mom. We did the whole thing without an agent. It needed a lot of repairs and the whole thing flooded while we were in escrow. The pipes burst it was during winter the heat wasn’t on. So I had to jump into renovating and immediately kind of learning how to increase the value of the property. So I did that. And you know, I went from a studio apartment to half of a duplex even though it didn’t have air conditioning. It felt I mean, I felt amazing. I renovated it. It was nice. And I was just living in the duplex I was charging downstairs rent that mostly covered my mortgage. And it was shortly after that time when I discovered Mister Money Mustache. I’m sure a lot of people that you’ve talked to have started that or had that at some point in their journey. But that’s when things really started to go pretty quickly and I’d love to talk about that experience.

Tim Ulbrich  15:25

Yeah, and we’ll dive into that deeper and we’ll link in the show notes and Mister Money Mustache. For those that aren’t already familiar, I suspect many people are, great resource great blog will also link to other episodes, we talked about house hacking for those that that’s a new term. The idea is that you typically lots of different ways to house hack but you know, the most common we live in a duplex triplex or quad, you live in one unit, and you rent out the remaining units, obviously trying to generate income streams and hopefully cover a portion or majority of your mortgage payment in turn your what you think of often separately, your primary residence and then investment properties, bundle those together. And there’s some creative financing strategies of ways that you can, you can do that. And I want to come back in a little bit to talk more about real estate because I know it’s been such a big part of your plan. I do want to go back to the savings rate piece because I know you started with that $2,000 month goal. You shared with me in advance that eventually you’re pushing that up closer to $4000 to $5,000 a month. A lot of pharmacists hear these aggressive savings rates. And they’re like, how? Right, how? You know, you think of a typical pharmacists income, take home pay $7000 to $7500, maybe $8,000 a month, depending on what they do. You look at large fixed costs, like house, cars, student loan payments, daycare, childcare, other expenses. And we work with many pharmacists where there’s just not a whole lot of margin, at least in current expenses. So give us a little bit more of the behind the scenes of how you were able to actually allocate a large percentage of your income? What sacrifices did that require? And then where were you putting that money? I heard early on it was cash savings beyond the 401k. But was that in IRAs? Was that brokerage accounts? Where were you putting that money? 

Mike Byers  17:13

As far as stocks and retirement accounts, it’s just 401k. The Roth and the traditional just, I was saving so much at the time, the income limits, and then the limit that you could put in just seem too small for me. So how do you save? I mean, you mentioned that the three biggest things housing, transportation, and whether or not you have kids, I guess your third one would be food? If you don’t have kids, that third one, if you do is day care. Yeah. So house hacking. That’s the big way to save on your housing costs. So at one point, my housing costs were zero, because the rent went up. And I was saving at that time, I had paid off the loan on my car, and I kept it. So a lot of folks will pay off one vehicle and buy in the next or keep buying new vehicles that are pretty, pretty frequent pace, but if you keep your vehicle eight, nine, ten years, when you get to that point, it’s paid off. You can save a lot of money. So I was saving probably in the realm of $5,000 a month. So that included a paid off vehicle. It included rent from downstairs, a little bit of overtime manager salary. And saving on food. I mean, just not going out to eat a lot. That was a big thing for me. I mean, you can play the game where you get pretty extreme. And it was too much for me. I mean, there was one point where I was calculating the cost of the extra food I would have to consume to walk to work versus the cost per mile of gas if I had driven so what I was doing with that $5,000 a month, I was putting it all in my checking account. Okay, fine. It was just building out pretty quickly. I called the mortgage company and I said, hey, this PMI insurance. I have, you know, a certain amount of equity at this point. Can we make that go away? And they said no. I said why? And they said, Well, this is an FHA loan. 

Tim Ulbrich  19:26

Yeah, right. Did it. On my first home. Didn’t know that.

Mike Byers  19:30

Yeah, blame myself. I blame the mortgage seller, whatever. I was so angry by that. And I was saving so much money that I paid off. I think it was $100,000 loan balance relatively quickly, like within a year and a half. Just because I was mad about that. And I wanted to make $120 a month go away. So I was putting it back into the real estate.

Tim Ulbrich  19:55

Got it. Okay. You mentioned something really interesting. You talked about of extremes, right? And you see this sometimes in the FIRE community and and let’s, let’s say out there and everyone’s on their own journey, everyone’s situation is different. You know, everyone’s cost a living expenses are different family situation is different. So everyone has to figure out what is the journey and pathway that allows them to achieve the goals that they want to achieve. But those that are on this financial independence, retire early or retire optional journey, you know, there is what you call the potential for this frugal fatigue. Right. And I love that term, because it’s real. And there’s a time and season for it, for that grind. And there’s a fatigue that comes with that as well. And so, my question for you is, how did you combat this? When you recognize that? What did you do to say, Hey, this is real, and I’m achieving all these great goals, and I’m saving a lot per month. But this fatigue is real. How did you combat that fatigue?

Mike Byers  20:51

I mean, you have to be honest with yourself and say, What am I doing now? What is the result gonna be? I mean, if I’m saving so much that it’s driving me crazy. The result is you’re gonna go crazy. But for me, I would. For me, it was adventure. So when I got pretty fatigued with the daily saving, and it wasn’t like I was living this life where I was, you know, things were relatively scarce and I wasn’t having fun. But at time, like I bought an Airstream when you’re holding back so much, and you’re just kind of yearning for adventure, you see a commercial for the new Airstream. You just buy it. And you can adjust. I mean, just because you go down a path of a certain savings rate doesn’t mean you have to stay there, you can make adjustments. I ended up selling it a few years, a few years later. And the money that I lost, I guess you could say last was a great experience. So you just keep adjusting yourself and you have honest conversations with you or with your spouse if you’re married on okay. What are we saving? What experiences aren’t we having? Right? What is that going to result in in the future? Because you could have two different ends of the spectrum. You could have YOLO. And I know people like this and they’re happy. You only live once, they’re spending their whole paycheck. They’re not thinking too much about the future and holding back on some things. They’re just living life now. But there’s the other end of the spectrum, which is deferred gratification. Yep, either one of those two, seems a little extreme. And you could get screwed either way. So if you’re YOLO, and not saving anything, and leveraging all your salary and income to have fun today and you live to 100. I mean, you could be screwed. Sixty-five When you start to not have energy and ability to work, I mean, yep. But if you defer everything and you die at 50, you’re screwed as well. So you have to find your balance in the middle and continually be honest with yourself and have the conversations with your spouse on what the right balance is.

Tim Ulbrich  23:17

Ton of wisdom there, Mike. And there are several resources that are coming to mind that I feel like of what you shared. You’re kind of pulling from, you know, some different philosophies and putting it together. What we often say is, hey, we’ve got to figure out how we can save and invest for the future to take care of our future selves, but also live a rich life today. Both of those things can happen and be true. While that looks different for everyone. And, you know, I’m thinking of some of the resources that have influenced my journey. Rich Dad, Poor Dad, The Millionaire Next Door or Die with Zero by Bill Perkins. 

Mike Byers  23:45

I just read that.

Tim Ulbrich  23:47

Bigger Pockets. Like, I kind of hear a little bit of pieces of these. And what I love is you’ve taken these teachings, and probably many others, and said, Hey, this is what is ideal for me and my journey. And I think the way you articulated that is beautiful, and I want to talk more about the real estate. So 2012 You buy the duplex sounds like that was a good move in the house hack. You weren’t a one and done real estate investor. 2019, you decide to do a deep dive deeper dive into real estate beyond that initial house hack, which ultimately, when we talk about current state would allow you to cut cut back your work altogether to replace that income, but initially go from that full time to less or full time 30 hours a week. Where did that motivation and drive come from? Do that deeper dive in real estate and tell us more about that second investment, the one that you you kicked off in 2019.

Mike Byers  24:41

So I had lived in the duplex for about five years 2013 to 2018. I had gotten out of a four year relationship at the time and I’m driving to visit my brother in Sioux Falls, South Dakota. It’s pretty long drive so I’m doing a lot of podcasts listening and I discover some things was about real estate. So again, I was kind of on the path. But I listened to some information on podcasts that said, well, you have another opportunity to continue down this path. I mean, I was sit still saving a bunch of money living there and earning a good salary. By the end of that trip, I decided that I wanted to buy another property. I wanted to continue, there was no, there was no reason not to grow this. And at that time, I felt like I had a little more tools and resources and experience to go down that road. So I bought another house, I was able to pay cash without a loan because of my savings rate over those last five years. And I lived in it, renovated it. I rented it out for a decent price. And I hit a certain number that I wanted to hit. And I thought I was the King of Real Estate in Pittsburgh. I bought another one. And before I was finished with that one, and ultimately ended up in another low point in my life where I just had too much going on. And I ended up selling that for a loss because it was just too overwhelming. But I, you know, these are the things you think about long car rides and long bike rides. It’s like what is the purpose of what I’m doing? And I had said to myself, I have this duplex, it has the opportunity to give me two rents. And I have the opportunity, because nothing’s really tying me down, to buy more real estate. And I think in order to do that, I need to cut back hours. So eventually, I asked to be cut down to 30. I got a really great store where I work three days a week, every fifth weekend. So that gave me the time and the freedom to eventually build more real estate. And the salary that I’ve lost over that amount of time, it’s, it’s really not a big deal. Because what you’re able to build with your time, or the freedom that you’re able to have is worth the cost. 

Tim Ulbrich  27:17

In terms of your portfolio, you started with the duplex, you buy another one in 2019. Sounds like that goes well. The one after that not so much. You mentioned a low point, what what did you do to kind of pick yourself back up and say, Hey, maybe I’m not the king of real estate in Pittsburgh, but I also have something here to offer. And I think I’m on to something in terms of building some real assets here. How did you get out of that trough and really get yourself back in the game?

Tim Ulbrich  27:46

And then that portfolio, the current day portfolio you just mentioned, has gotten to the point where work is optional. So you went from 40 hours a week to 30 hours a week. And now that portfolio is generating income such that if you need to, want to work in the future great, you can or if you want to pick up extra hours, but you’re not in a position of needing that income. 

Mike Byers  27:46

I mean, thank God, I met my wife at that time. Because she gave me the confidence and believed in me. And I’m the type of person that if someone believes I can do something I could, I could climb a mountain pretty easily. Amazing, amazing luck that I found such an amazing person. And she believed. She knew what I had done in the past with the single family home and the duplex and the skills that I have built and the knowledge that I had built during this time. And sometimes all you need is a partner that can believe in you and do it with you. So we basically went on a buying spree and use the equity in those two homes to buy four more homes and rent those out. And that’s what our portfolio looks like today. Four single families and a duplex plus our primary house.

Mike Byers  29:14

Exactly. 

Tim Ulbrich  29:15

Okay. Yeah, man. That’s awesome. Congratulations on the journey all the work.

Mike Byers  29:20

Yeah. So that was a goal. And things change when you have kids. And we had two children born pretty close together. And we were coming towards the end of my wife’s maternity leave for our second child and we were deciding what to do and it was a decision for me to stay home and not work. And the investing in assets and growing those assets and having those assets give you a return to buy more is what allowed us to have a one income family.

Tim Ulbrich  29:58

And your boys are how old now? 

Mike Byers  30:00

They’re one and two. 

Tim Ulbrich  30:01

All right. All right. So you’ve got options for time and flexibility schedule with them. That’s cool. If we zoom out for a moment, and look at your pathway to becoming a seven figure pharmacist, and now looking at your asset base as a whole, not specific numbers, but just general percentages, if you were to break that down between, you know, more traditional, right 401k types of dollars versus the assets that you have in real estate, or potentially others that I’m not yet aware of, like, how is that net worth broken down?

Mike Byers  30:36

I would say 60 to 70% real estate. Probably 60% of real estate. And then the rest is in 401k.

Tim Ulbrich  30:46

Okay. Okay. And we haven’t even touched on obviously, a whole nother aspect of the real estate, you know, you’ve got your cash flow you’re generating now there’s future appreciation, there’s tax advantages, if anyone wants to dive into that deeper, Tax Free Wealth by Tom Wheelwright, great resource to kind of just open your eyes a little bit if, if that’s not something you’ve you’ve considered before. 

Mike Byers  31:08

I mean, for our real estate specifically, I mean, if you think about it, there’s three, three or four different ways where you make money. So there’s cash flow, there’s appreciation, and there’s loan pay down. So what we shoot for with our properties is $1,500 a month. $500 is $400 or $500 is cash flow. $500 is being paid down by the tenant and then above $500, is appreciating, and when you multiply that by several properties, you get that automatic savings in those two parts, you get the automatic savings where the tenant is paying it down, and it’s appreciating in value. And then you can use the cash flow to reinvest or if it’s a different season of your life where you need to live on cash flow, you can do that you can take a break from work, you can take a sabbatical. And it’s it just provides you options. Right now, what I’m looking at is, what kind of options has what I’ve built in the past, giving me to live a great life with like I, like you mentioned the book Die with Zero, you get to 40 years old, and you start thinking, Okay, I have this money saved because I was diligent and being able to save, what does the next 10 years look like? Am I going to sacrifice weekends with my family and nights in order to have one or two extra million dollars? You know, maybe your kids and your spouse they want you home? So that you know you can you can live a different life with experiences. And that’s something that you think about when you turn a certain age and you start wondering how much more do I really need to be comfortable after 65. I don’t want to be self insuring myself if there’s a maybe there’s an insurance product or an annuity that you can buy, that would serve that same purpose.

Tim Ulbrich  33:11

And options is the word I hear. Flexibility is the word I hear. And it’s interesting when I polled our community about the idea of financial independence, whether or not they want to retire early. You know, some people love what they’re doing. Some people don’t like what they’re doing. Some people might want part time or to pivot. But the goal of financial independence, I think, is one that resonates with people as a whole. And when I asked that question, you know, what excites you? What motivates you around that concept of financial independence? It’s options. It’s flexibility. It’s being able to choose and to have choice in those things along the way, which I think your story is such a good example of that as well. Mike, when you look back on this journey, and one of the things I appreciate is in the transparency and the vulnerability. You know, we could look at the current state and say Mike is crushing it, and you’ve done incredibly well. But there’s been highs and there’s been lows along the way. And there’s been a lot of learning that’s happened. As you look back on that journey from net worth of zero to becoming, you know, well into a seven figure pharmacist, what lessons do you take away as you reflect back on that, that you can share with our listeners?

Mike Byers  34:20

I think a good lesson to learn is have honest conversations with yourself about the alternatives. So if you’re on the path, and you’re making and not saving, if you’re making a certain amount and you’re not saving a whole lot and you get to the point where maybe you’re thinking there’s something more I can do. Maybe I can save a little bit more or maybe I can make investments outside of my 401k, they’re gonna be a good return and give me cash. flow like real estate. Just have honest conversation about what the alternative is. Because sometimes the alternative is you get stuck for a long period of time in what you’re doing because you didn’t take those five years to save diligently, or to pursue something that you’re interested in as far as a side hustle or take that job. So I sit down, evaluate what you’re doing and what path you’re on. And where that’s gonna lead to 10, 20, 30 years down the road. Five or 10? Whatever.

Tim Ulbrich  35:44

Yeah, and I hear a lot of patience in your story. I hear a lot of, you know, seasons of sacrifice, but also seasons of perspective, and kind of reevaluating where am I going? What are we trying to do? I’m curious, as you look out, you mentioned this time window into the future, as you look out, where do you see your real estate portfolio going? You know, now that it’s gotten to a point of replacing your income, do you see yourself kind of staying put in this model where you’ve got a duplex and several single family homes? Do you see an expansion within that same investment category? Are you interested in, you know, commercial or short term rentals? Like, what? Where are you envisioning the future of the real estate portfolio?

Mike Byers  36:23

So I’m envisioning, I mean, my, my vision is to work on it three to four hours a day, from a coffee shop and manage the investments. So I wish I could give you a better answer. And part of stepping back from the pharmacy job and trying new things is this level of uncertainty and really uncomfortability like, things aren’t amazingly comfortable right now. I mean, I’ve really had to unwind some of the programming that 20 years of retail pharmacy put in me, so it’s tough, and I can’t tell you exactly where I want to be in this is a period where I am. But I mentioned the word sabbatical. So it’s, it’s a period of time where you’re not forced to work, where, you know, thank God, my wife is just so amazing and understanding. You can take the time to figure out your next path. And instead of working nights and weekends for the next 10 years to figure out how to have your kids experience and watch you live an amazing life. So that’s an evolving thing. And maybe we’ll catch up in five years, and I can tell you what it evolved to. I you really have to think about what your passion and purpose is. And sometimes you look at 100 jobs on on LinkedIn or Indeed, pharmacy/medical related and you just can’t see yourself doing that. So I’m trying to find my passion and purpose right now. And I really think it is in real estate, whether it’s rental real estate, commercial, vacation rental or flipping. I’m trying to figure that out. 

Tim Ulbrich  38:19

And what excites me about that is I sense this is a season of, you know, some of that deep reflection and figuring out the next steps. You use the word sabbatical as well. But you know, another tip of the cap to the work that you’ve done, you’ve put yourself in a financial position, with the support of your family to be able to take the space to think and think strategically, right? And that’s an amazing opportunity, but it didn’t fall in your lap. You worked incredibly hard for that to happen. So congratulations, Mike on on the journey. I do look forward to following up and following your journey. Along the way. I know it’s been an inspiration to me, I’m sure it will to our listeners as well. So thank you so much for taking time to come on the show. 

Tim Ulbrich  39:01

As we conclude this week’s podcast, an mportant 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 Is 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 363: A Conversation with My Dad: Lessons on Entrepreneurs, Fatherhood, & Finance


YFP CEO Tim Ulbrich talks with his dad, Tom Ulbrich, on entrepreneurship, fatherhood, and finances.

Episode Summary

In celebration of Father’s Day, Tim Ulbrich talks with his own dad, Tom Ulbrich, to have a conversation on entrepreneurship, fatherhood, and finances. 

During this wisdom-packed dialogue, Tom shares his career journey starting with running a family business, to developing an e-commerce business out of the basement of his home, to achieving his MBA in his 40’s, to his time in academia, and to now leading a large nonprofit in Western New York. Tom shares his thoughts on his two sons going from traditional to non-traditional career paths, how he and his wife, Lynn, have defined what it means to be living their rich life, and his take on redefining retirement and why it shouldn’t be a one-size fits all approach.

This special conversation highlights the generational throughline in the Ulbrich family of entrepreneurship and how career and life choices are about the journey, not the destination.

About Today’s Guest

As a passionate advocate for small business and a former business owner himself, Tom Ulbrich intimately understands the power that entrepreneurship has to unlock human potential, create jobs, inspire wealth, and invigorate economies and communities across the globe.Tom is an entrepreneurial leader with broad-based management experience in both the for-profit and non-profit sectors. His passion for social innovation is focused on nurturing strong relationships and building consensus across diverse groups of stakeholders in the academic, for-profit, non-profit and government sectors.

During his prior tenure as an assistant dean at the University at Buffalo’s School of Management and School of Social Work he did extensive work in the field of social entrepreneurship with a focus on the emerging concept of the “entrepreneurial non-profit”. He retains an appointment at the UB School of Management as Executive in Residence for Entrepreneurship. He is a speaker and writer with a weekly newsletter titled Soar, Don’t Settle where he shares his thoughts about business, leadership and life. He is also a member of the Forbes Non-Profit Council and contributes content that you can find on Forbes.com. In May 2020, he became President and CEO of Goodwill of Western New York  where he is working with a dedicated team to apply an interdisciplinary approach to social innovation in a real world setting.

Key Points from the Episode

  • Career journey from family business to nonprofit leadership. [0:00]
  • Entrepreneurship, identity, and risk-taking in various professions. [7:54]
  • Importance of financial literacy and creative problem-solving in education. [15:06]
  • Entrepreneurship, risk mitigation, and leadership. [19:05]
  • Entrepreneurship, leadership, and strategy. [27:25]
  • Personal growth and career development through education and experience. [35:28]
  • Starting and selling an e-commerce business within a family-owned landscaping business. [38:42]
  • Career pivot from family business to entrepreneurship, with reflection on past experiences and their impact on current success. [43:50]
  • Parenting and entrepreneurship, balancing safety and individuality. [47:11]
  • Finding balance between saving for future and living a rich life today. [52:07]
  • Financial planning, relationships, and experiences. [59:20]
  • Individualized retirement planning and prioritizing personal goals. [1:02:18]
  • Financial planning, retirement, and career fulfillment. [1:07:49]

Episode Highlights

“I feel like everything I’ve done prior to this, all the pieces of that journey, have led me to sort of my dream job where everything is coming together. Entrepreneurship, leadership, all the things that I love to do, are sitting here in this job.” – Tom Ulbrich, [5:29]

“So to your point with with young pharmacists that are on a career path, I think the challenge for many people, especially when they have invested in education, a lot of money, a lot of time and have deep expertise in a field, you can get trapped and stuck, because it’s uncomfortable leaving something that’s comfortable. But by never leaving, what makes you feel comfortable is really that can potentially really rob you of having the thrill of being able to do something that you can make a good living at, and still be passionate about at the same time.” – Tom Ulbrich [5:48]

“There is you have to think about skills, not think about titles, not think about licenses. But think about the diverse set of skills that you’ve learned and that you’re that you that you’re a unique individual that’s put together all these little pieces along the way that makes you special, and whatever that next step is that you’re after.” – Tom Ulbrich [7:35]

“I don’t think we give our kids either in school or sometimes as parents enough teaching or learning around creativity because the truth is the world we live in today, a degree is a piece of paper. That’s great. And I know it’s required for many professions. But what you really need to do to be successful today is you need to know how to identify what the true problem is when you see a problem.” – Tom Ulbrich [14:25]

“The fact is, entrepreneurs are really great risk mitigators, they don’t gamble. What they do is they try to identify what the risks are, mitigate what they can, and then understand what true risks they’re taking.” – Tom Ulbrich [20:45]

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. In celebration of Father’s Day this weekend, I brought my dad Tom Ulbrich, onto the show to have a conversation on entrepreneurship, fatherhood, and finance. During this episode, my dad shares his career paths starting with running a family business to start another business in our basement, and then leading a large nonprofit in Western New York. His thoughts on my brother and I going from traditional to non traditional career paths, how he and my mom had to find what it means to be living their rich life, and his take on redefining retirement, and why it shouldn’t be a one size fits all approach. This is a good one, my favorite episode thus far in the 363 episodes, and nearly seven years that we’ve been recording the show. Happy Father’s Day to all the dads out there listening. I’m rooting for you. 

Tim Ulbrich  00:55

Dad, welcome to the show.

Tom Ulbrich  00:57

Excited to be here. Thank you for having me. I’ve been looking forward to this.

Tim Ulbrich  01:01

Well, it’s a joy to say those words, something I haven’t been able to say on the first 362 episodes of the podcast. I’m looking forward to the conversation. I think we could spend hours talking about a variety of topics around fatherhood, entrepreneurship financing. So we’ll see where the conversation goes, I do want to start with your career journey. And the reason why I want to start there is that, as I was talking with you about the other day, I see a lot of pharmacists that are stuck. Stuck defined by the sunk cost of time and money that they invested into getting their pharmacy degree and perhaps they’re interested in something else that might be within the profession that might be outside of the profession, but they’re unable to see paths, the straight line path that they embarked upon, many at a young age. So with that backdrop, give us an overview of your career journey, that I think highlights so well how it’s really much more of a journey and not not a destination. 

Tom Ulbrich  01:58

Sure. I’m happy to do that and cut me off if this gets a little bit long. It’s a long journey, right, at my age, but, excuse me, the so my path started with I had one goal in life when I was graduated from high school – that was to get married to your mom as quickly as possible. So the pathway for me to do that I didn’t didn’t have any particularly great interests in one thing or another, was overall, a decent student. But the family we had a garden center in the family, landscaping business. So I’m like, let’s go into the family business. So I can get done with school. I went to school for ornamental horticulture and landscape design, entered the family business, got married right away, and Michael came along almost immediately, then you. And for over 20 years, I stayed in the family business, not because I was necessarily passionate about it. But because it was that that sort of like straight line you were talking about where you’re, you feel I don’t want to say I ever felt trapped. That’s not the fair, fair word. But I felt responsible, like it was my job to provide for the family. So once you both were in college, I decided to pursue some of my dreams, which meant I went back to get my MBA, I decided to leave the family business and actually ran for public office unsuccessfully. And the reason for running was I was very involved supporting small businesses through the National Federation of Independent Business and thought, why not do this on public policy side. But when I ran under those auspices, what happened was I had an opportunity then given to me at the University of Buffalo to run their Center for Entrepreneurial Leadership. So went Hey, you want to do all this stuff. You don’t need to be elected official, come here and do that. And I’ll kind of speed that all up, but I was there for 12 years. I became the Executive Director of the Center for Entrepreneurial Leadership and became an Assistant Dean and faculty member in the School of Management where I taught entrepreneurship. And then towards the end of my time at University of Buffalo, which ended in 2020, I had a dual appointment as Assistant Dean to the School of Management was well of the school as well as the School of Social Work. Where I working on a real passion project and that was social innovation or the the intersection of for profit, business and social sector or nonprofit business. In 2020, I was recruited by a recruiter to Goodwill. Have to be honest for probably six or eight phone calls, I said thanks for calling. I’m not interested in running a bunch of retail stores. I finally did meet with the board; was really intrigued with the business model here at Goodwill that we are a social enterprise and that we can you know we can raise money or profit through our retail stores and reinvest that into our workforce development. So the challenge to me as an as an entrepreneur, and I didn’t mention along the way, we’ve started a couple businesses and stuff, I’ve skipped that part. But having been an entrepreneur, the challenge was I’ll come out of academia and do this in the real world. And I kind of took the bait, and here I am at Goodwill. I’ve been here for four years, and absolutely love the work here, and feel like everything I’ve done prior to this, you talk about journey, all the pieces of that journey, have led me to sort of my dream job where everything is coming together. entrepreneurship, leadership, all the things that I love to do, are sitting here in this job. So to your point with with young pharmacists that are on a career path, I think the challenge for many people, especially when they have invested in education, a lot of money, a lot of time and have deep expertise in a field, you can get trapped and stuck, because it’s uncomfortable leaving something that’s comfortable, but by never leaving, what makes you feel comfortable is really that can potentially really rob you, I guess it’s the right word, I was looking for the right word, rob, you have the thrill of being able to do something that you can make a good living at, and still be passionate about at the same time. And I think what people have to think about is not the degree, not the technical skills that I have, but under the auspices of a pharmacy license, but to think about what skills do I have that transfer to many other things. You’re, you know, you’re a perfect example, and many of your friends are that you’ve taken those skills that come with what you’ve learned as a pharmacist and gained all this experience along the way, then you’re able to pivot into something that uses those skills. I think we were talking about the other day, you see this a lot and people that come out of the military, incredibly skilled and valuable people for any organization. But it’s really hard sometimes to transfer those jobs, like what you did in the military, and how do they transfer out into, you know, the business sector here back home, or? And I think what happens there is you have to think about skills, not think about titles, not think about licenses. But think about the diverse set of skills that you’ve learned and that you’re that you that you’re a unique individual that’s put together all these little pieces along the way that makes you special, and whatever that next step is that you’re after.

Tim Ulbrich  07:54

Yeah. And I think that goes back to this idea of identity not being attached to the degree or the title. And I think for our profession, we struggle with that, right? Because at 18, 19, 20, 21 years old you know, there’s a story of, hey, you’re going to be a doctor, you’re going to have a pharmacy degree, you’re going to do X, Y, or Z and a feels big, it feels weighty that you have to make these decisions. And I think there’s actually a lightness and a relief as scary as it may sound to the listeners of kind of stepping into this uncomfortable territory and detaching yourself from the identity of the degree or the identity of you know, I’m a hospital pharmacist or I’m an industry pharmacist. It’s it’s about these transferable skills that we’re talking about. And I think honestly, one of the many things you taught me, maybe it was said, maybe it was unsaid, it was role modeled, like I lived that firsthand. I saw you go through this journey. I was in high school, finishing high school, going into college, when you made this transition and entered into the MBA ran for political office took the next step. I remember the phone call when I was in the airport traveling when you’re interviewing with Goodwill, right? Like we’ve lived these things firsthand. And my brother, Mike, he’s a great example of this. You know, he’s an industrial engineer by training. He went in, worked in corporate finance was very successful. And then he got 10ish years in and realized like, hey, I want something different for my life, for my family. And the pivot moment from for him was when he was able, with the help of a coach and some others, to detach himself from the identity with the degree or the identity with the role that he had spent his first decade of his career in. And that’s uncomfortable, but I want to talk about that uncomfortable in this because human beings are wired for safety. Right? That’s that’s normal and everything else is a risk. And for pharmacists, that’s real. Doctorate degree, good paycheck, lots of debt to pay off. Any other path than the quote, “norm” is risk and that’s hard hurting our profession. Because what’s this? What’s the incentive for taking risks and taking innovation? So as you’ve taught many entrepreneurs, and you’ve lived this journey yourself, what would you have to share to those folks that are, hey, I’m wired for safety, I see that and this idea of stepping outside of that is uncomfortable.

Tom Ulbrich  10:18

So that that’s great background, and really a really good question. And remind me I want to get back to we’re, you know, Father’s Day, and I want to talk a little bit about how parents are part of that journey with us shaping us to, we’ll come back around to that, but back to, you know, I’m gonna go back to the classroom for a minute. So one of the interesting things they taught entrepreneurship, and anybody on here should be saying, how do you teach entrepreneurship? Well, the fact is, you you don’t. Really to become an entrepreneur, you need to live in what we teach people are, here’s some best practices, how to validate a business, how to do customer discovery. But what you’re really referring to is something that you that I picked up, I only remember where I picked it up from a long time ago, is in entrepreneurship is the concept of 50,000 chunks of experience. So meaning that you will not be successful until you gain that experience. And you gain that everywhere. From you talked about a pharmacy degree. But you gain it also from role modeling. So both of both of my sons, now we’re entrepreneurs, not I was an entrepreneur, my dad was, in a sense, an entrepreneur. So we learn these skills by role modeling and seeing it. One of the interesting things when you look at data around entrepreneurship, and most of the data I’m familiar with is around minority entrepreneurship and women owned businesses. Until the last maybe 10 years, the the those demographics struggled mightily with being able to be successful entrepreneurs. And the question is, why? What the research showed was the why is, where’s the role model? Whereas somebody that looks like me, that has done this before? So long winded answer to say, yes, we as human beings are risk averse, we are wired that way. And the further down a path you get in a good career, like being a pharmacist, the that risk aversion just tightens and it’s even harder to walk away. And many entrepreneurs, you don’t need to be successful, like Mark Zuckerberg is an outlier, the 21 year old that created something and blew it up. Most entrepreneurs are successful later in life after they gained their experience, and they are in a stuck track. But what often happens is we have a financial downturn, something happens and maybe they lose their their job. And they’re sort of forced into entrepreneurship and recognizing can do that. Yeah, if I can, can I back up to parenting for a minute? Because I think it’s important and and no and answer your question. Will not question but your your comment about, did I role model for you? No, not deliberately at all. In fact, not at all, but it may have happened. So I think one of the challenges too, as parents, we want what we think is best for our children, I think everybody does. And sometimes we maybe think about it through the lens of safety for kids. And we don’t, we’re afraid and we almost drive people to a profession. Remember, when you’re thinking about college, you didn’t really know what you’re wanted to do. And I think we’re like, oh, this is probably you’re really good in these things. 

Tim Ulbrich  13:39

Yep. 

Tom Ulbrich  13:39

But it doesn’t mean that something you were passionate about or wanting to do. So I think from a parenting standpoint, and I wish I would have known these things, you know, 40 years ago, but I we did the best we could with what we knew, right? Probably would have done things differently to just try to understand now that I know how successful you can be as an entrepreneur, focus a lot more with understanding the unique individual that each child is and spending a lot more time in creative play, teaching about innovation, and not so much in the structure of I don’t want to say school because I don’t want to say schools are bad. It’s not. I don’t think we give give our kids either in school or sometimes as parents enough teaching or learning around creativity because the truth is the world we live in today, a degree a piece of paper. That’s great. And I know it’s required for many professions. But what you really need to do to be successful today is you know, how you need to know how to identify what the true problem is, when you see a problem. How do I look for the root cause of that problem and know how to do that and you know how to seek out information, really. Those are and solve problems creatively, which is really creative, creative problem solving.

Tim Ulbrich  15:06

Yeah. And you said the other day when we were talking, you said, hey, if we as a nation, right want to remain great for centuries to come, we talked about two things, you know, personal finance education, our listeners will give an amen to that and then creative problem solving. Right. And it’s interesting, I was just read an article the other day, you know, you think about all the focus around STEM over the last 10-15 years, and I’m not saying STEM is bad in any way, shape, or form. But even look at an area of study like computer science, and I was reading article about computer science graduates coming out having difficulty, you know, finding jobs because of AI and some of the replacement and technology thing that’s going on in coding, etc. And, you know, we have this huge surge of focus in that area, you have an overabundance, right, in some regards to people that are going into those fields, and now we have disruption that’s happening right now. But when you look at something like creative problem solving, so I’m very hard to teach in a structured environment, very important skill, that translates that is not easily replaceable, as we think about where trends are going. 

Tom Ulbrich  16:02

Sure. And when what you just said is really critically important. Imagine if we taught these two things, from the time your kindergarten or even before – financial literacy, and creative problem solving. Yeah, if that was baked in to the basic sort of like a core curriculum that that was part of the core curriculum, those things it would really change so much for the better. Because, you know, in the work that you do, how many people don’t understand financial literacy, and we can’t blame the individuals, you know, yes, you’re responsible to learn that, but they’ve never learned it. And they also back to role modeling, we talked about with entrepreneurship, you also role model people with money, too, right. And so you have, you have poor role models, quite frankly, and aren’t sure themselves, because they never learned how to handle their finances. So I think those two things could really, really start to teach things. And what’s fascinating to me, we talked a little bit the other day about the Medici effect, which is, which is really important, which, if anybody’s interested in that maybe could put it in the footnotes of Franz Johansson has wrote the book and had some really great simple TED Talks and learn about it. But it’s really around the concept that creativity, and innovation are enhanced by diversity, which is really interesting to me, because we’re so focused on diversity, which it’s important. But it’s all those diverse experiences, which ties back to our beginning discussion, and its diversity and everything. It’s in diversity in the people we work with. And that diversity isn’t just ethnic diversity, its age diversity, education diversity, likes diversity. It’s all that diversity. When you take people that are diverse, and you put them together, the sharing, and the creative, problem solving that can happen is just really, really amazing. So again, to teach that, and to stop, you know, that whole concept sort of busts up our limited thinking, and that’s what holds us back is, is we’re, we’re just back to risk aversion. We’re wired to be risk averse, okay, I’m making $110 grand as a pharmacist, or whatever pharmacists make, and why do I want to give that up? Like, maybe you want to give that up to pursue something that you’re really, really passionate about, that you’re going to thrive in, and maybe you’re going to make way more money, doing something that you’re passionate about. And again, I don’t believe in the old saying, do what you love, and you’re going to be fine. I think you have to balance that you can’t just ignore, you have to look at your skills. But what also is nice about having a career like a pharmacist, you can you have the safety of your career, while you build something. So if you’re really want to do it, and you’re willing to put in that extra work in the evenings in the weekends, you can build it while you have the safety of your of your career at the same time.

Tim Ulbrich  19:05

Can we talk about that for a minute? Because I think we tend to generally speaking about pharmacists, especially because of the things we’ve been talking about with, you know, some of the fixed mindset around the degree and the ceiling of income and the debt we have to pay off. You know, we tend to miscalculate risk, meaning we blow it out of proportion. And I found myself doing this early in my own journey. And one of things I often say is that at the end of the day, your pharmacy license is the greatest emergency fund you’re ever gonna have. 

Tom Ulbrich  19:32

That’s true. 

Tim Ulbrich  19:33

So if you take a risk, and worst case scenario happens and it doesn’t work out, to be able to have something you can fall back on that you can make $55 to $65 an hour. I’m not saying you want to go do the work that’s available necessarily or want to do it forever. But that is an incredible asset to lean on. And it really changes your perception of worst case scenario and taking risk and I’m curious from your perspective of your own business journey and mentoring many other business owners, how do you help people really evaluate risk objectively, when it becomes so emotional often that we look at it, and perhaps it looks scarier than it really is.

Tom Ulbrich  20:14

I think that’s an excellent point. So so as we keep saying, people are naturally risk averse, most of us. Here’s the other fascinating, you know, studies around entrepreneurship. Many people and I think people that are maybe in your industry that are considering doing something different or building something, they look at entrepreneurs and assume that they are these insane risk takers and throw it all down, you know, I guess it’d be the equivalent of going to a casino and putting all your money on black or red, whatever it is. The fact is, entrepreneurs are really great risk. mitigators is what they are, they don’t gamble. What they do, they try to get the risk, they try to do whatever they can to identify what the risks are, mitigate what they can, and then understand what true risks they’re taking. And, and I know myself and probably most successful entrepreneurs, they’re not they’re not taking 80% chance of having a loss, they’re looking to make sure that they’re way better than a 50/50. If I go into this, and how do they do that, the way you do that is lots of research, lots of Proforma work, like trying to understand how I’m going to make this work. But the most important thing is if you have a new idea – customer discovery. Speaking to potential customers early and often, talking about what you’re going to try to sell or what you’re going to present to somebody. And if the market is there, you’ll be able to see that the market is there, because all too often, many of us have a passion about something and go run off and build a business without ever asking is somebody going to buy my product, right. I’ve done that a couple of times, and you start to customer discovery, realize you’re the only person that’s interested in this. So it’s really important to not be the gambler, is what it boils down to. And to do that work that you can do. And think about mitigating risks before you take that next step for it.

Tim Ulbrich  22:17

That’s so good. I often say that the best businesses are when you can combine something you’re passionate about plus a problem that needs to be solved plus is something that people are willing to pay for. And sometimes you can have one of those or two of those but not three of those, right you can have as you mentioned, you can have a passion, but people may not want what you’re selling, or it’s not necessarily solving a problem that is as big as maybe you think it is. Or you could be solving a problem that you know isn’t big enough that people are willing to pay for it. And so you’ve got to really do all of those things. And hopefully there is passion behind it. Because as you know, firsthand business is going to have ups and downs. It’s inevitable. It’s gonna have highs, it’s gonna have lows. And I believe that when the lows are there, like you better have a really strong passion that’s kind of grounding you right to keep you anchored in those seasons where things aren’t going so well.

Tom Ulbrich  23:06

No dead on. And I think our society too, we have to be really careful about that word, passion, meaning I’d like to talk, you know, flip that a little bit and say, purpose. Your purpose driven type of work. In our world today, I think we mix up sometimes passion and purpose. And I just wrote a blog post recently where I described a little bit – somebody had found that was very purpose driven in their work and what they did. And I’d said in the blog posts, I have a passion for music, I love music. And I, you know, I have four guitars, they can’t play any of them. Right? So am I really, really is is that a true passion? Or is it a like. So I think I think that’d be my first sort of tip to people make sure it’s not just something you’re interested in that you like, it really, truly is a passion. And again, in today’s world, I think we’re always told well, I’m passionate about this. I’m passionate about that. But making sure it’s a passion. And if it’s a true passion, you will never feel like you’re working because the drive that that purpose, that purpose driven drive, it just feeds you it gives you energy it gives you it builds you up even if you’re working full time you’ve got the juice to do something at night because you’re building something that you are truly passionate or purpose driven about.

Tim Ulbrich  24:30

I want to go back to your career journey. You know, it strikes me as you’re talking and you know, I kind of look at mine as the same and I don’t think that’s by accident. We talked about role modeling, and being comfortable with you know, kind of a staggered approach. It really feels more like a rock wall that you’ve climbed and you have climbed a ladder, meaning there has been exciting progressions but you’ve acquired the skills you’ve gone sideways, you’ve gone into different industries. You know, you started really what I would call if we over simplify your first half of your career. We are, you know, in a family business, starting your own business, then you had this time where you went back and got some additional training that led to other opportunities. You then were mentoring other business owners and coaching through the university. And now you’re in this stage where you’re you’re leading a large nonprofit organization. And so as you look at that journey, in hindsight, are there threads that you see that go across all of those, even though those roles are very different? You know, you’ve talked about entrepreneurship and problem solving, if you get a little bit more granular, are there things within those experiences where like, yeah, I see the obvious connections? 

Tom Ulbrich  25:35

Sure. I think one is leadership. I like to lead and I learned actually talking about role modeling early in life that I had some of those pieces that would make me a decent leader. And that was in high school, a coach actually making me Captain the team when I was nowhere near the best athlete. My brain said, always said, well, the captains are the the superstars, right. But somebody identifying early, seeing something where you can connect people you can, you can figure things out, and how people can work together. So I think leadership is one of them. The other is, I really enjoy fixing things and building things and building teams up. And I can see that connection throughout the way and very think the other thing, we also didn’t talk about what your mom and I started an e-commerce company that we sold a few years ago, that started as a catalog business, really out of necessity and seeing opportunity. So I think also, just the other thread is just opportunity seeking. So imagine in a stable family business, the stress that can put on things. Because in a family business, a lot of it is about stability, and everything’s okay. And then it’s not true, always I get that. But you have somebody that’s always kind of like trying to push the limits and looking for something new. And I don’t want to say never satisfied, but it might feel to other people, like you’re never never satisfied. But what’s the thread? I think a lot of it is building things, a lot of it is leadership. And a lot of it is seeing problems and wanting to solve them, thinking there’s a better way to do something.

Tim Ulbrich  27:25

You said never satisfied. And I know you hedge that and caught yourself there, which I agree with. But I want to go there for a minute, because I think one of the things that you and I share is very much an achievement mindset that I often say through my own work of counseling, other things, I’ve learned that it can be my greatest asset and my greatest crippler, meaning that like it’s an innate gift, that I can solve problems, I can see opportunities. I can, you know, build a vision, execute on the vision, get people excited about the vision, get things going, I like to build and create I’m not a sustainer, necessarily as well. But if I’m not careful, like that can get out of balance. And it can be the next thing. The next thing, the next thing without seeing kind of the bigger picture of like, what’s the purpose? What are we doing here? It’s not just about achieving one thing after another. So share with me your journey and that kind of never satisfied achievement and how you reconcile that I know you’ve done work on that yourself. And you’ve come to appreciate like, Hey, that’s a good gift and a skill, but it also comes with challenges.

Tom Ulbrich  28:29

It’s a great gift and a skill. And it comes with lots of challenges, right? So yes, we do share that. And I think that it’s probably not uncommon with achievers, I guess it’s what I would call it. It’s almost like overachieving. So I I didn’t really address this until later. But I I still work with the same coach and the coach I work with he really like nailed it for me one day and said, You know what, Tom, you’re really good at climbing small mountains, grabbing the flag as fast as you can, getting the top and then looking around for the next mountain, the next peak. But he’s like, why don’t you get on a big mountain where you can change the world. And it’s gonna take you years and years and think about their journey as a climb and a plateau a climb and a plateau and climb and a plateau, which is really, really helped me also to, you know, I, I went through thankfully, it’s no big problem, but went through some medical stuff, the last few months, which made me really really reevaluate like what’s important to me, and what am I want to do, what don’t I want to do? And unfortunately, most people don’t have those events until they’re in their 50s, 60s. It’s something we should maybe think about a little bit earlier, but let me go back to your thing about achieving so I think number one is if if it’s purpose driven, make that mountain bigger. So you’re gonna we’re wired to climb. I bet you most of pharmacists listening on here, didn’t get through pharmacy school without being a type A, at least some level achiever. If you’re going to be an entrepreneur, what I want people to do is to understand what type entrepreneur you and me are, we’re founders. We are founders were the, you know, we’re the people that are good at seeing a problem, seeing if there’s a market for it, identifying the resource, it’s going to take pulling together the finances, finding the team. And that is a skill set that’s super important to a startup. What we’re best to do, though, is to build a team and go on to the next business or the next idea, and not trying to manage the team, because our type of personalities get bored with management. And, and yeah, we could argue like, well, you need to fix yourself, no, we don’t need to fix ourselves. We need to lean in, lean into who we are, surround yourself with people. And my team, if they were listening here at Goodwill would start laughing right now. Because they know I’m going to be popcorning ideas all day long. And I have surrounded myself with with people that are good at operational excellence, I’m not. I’m good at identifying the opportunity of solving problems, ideas, but actually, you know, we as a company gets larger, putting that day to day operational management, and you have to surround yourself with people. Comes back to our conversation about diversity. Diversity, makes it all better. So you have a diverse group of, you know, managers on your team too, that bring different skill sets to the table, you never want to surround yourself with people just like you. 

Tim Ulbrich  31:44

That’s right.

Tom Ulbrich  31:45

Because you will be, what you’ll be doing is seeing opportunities, not properly implementing the structure to run the business, and you’re gonna be starting and failing, starting and failing starting and failing.

Tim Ulbrich  31:56

You know, it’s interesting, as you’re talking, I was just reflecting back on, you know, some of the experiences I’ve had within organizations where I’ve built and created things. And where I’ve gotten in trouble is when I built and created and then I haven’t had the resources to help sustain, maintain, or be comfortable and willing to let go, for whatever reason, and then all of a sudden, you end up in this phase where you’re trying to implement and continue to implement and sustain when you really are a builder. And that’s not good for you as the individual. It’s not good for the organization either, right? Because I would argue Goodwill is best when you are building and popcorning ideas. So how do we surround you, with people, as you have, that can help you implement. And good leaders, good managers will see that with their people, and really help identify and say, Oh, hey, Tom’s a builder, he’s an innovator. He’s not a sustainer. And that’s okay. Like, we need him building. We need him out there innovating for the organization. 

Tom Ulbrich  32:53

I think the way you attract people is the one thing you must have as a leader. In our organization, especially as you get into larger organizations, the difference between a small business and a larger business is really the complexity of what you’re doing. So I always think of management from sort of the team of team concept. We have all these little mini teams that come together as a big entity, right? Like a matrix, and it’s in a, in a larger business, you have that complexity, and how do you track talent, you attract talent, through leadership, but what the important part is creating a vision with a clear pathway for it says we’re strategy, strategic planning, and communicating that in an interesting way, not a book that’s it’s up on a shelf someplace that nobody’s going to read. But how do you tell the story? What’s the story about where we’re going as a company, and if you think of your role as a CEO, or leader, I always think of it as your the chief energy officer, the chief inspiration officer, you’re not the Chief Executive Officer, although that’s the title, right? Your job is to really rally the troops, create the vision. And I always say, carry that flag in front of everybody. And remember, just when you are sick and tired of hearing yourself, talk about where we’re going, people are only beginning to listen. And it’s really important that we stay persistent as leaders, and also find creative ways to talk about strategy. So what we do here, we actually take our strategic plan, and we put it into different types of journey that we can share with the frontline people. So the first three years of our strategy, we we took our strategy, overlaid it on a map and we created a journey from Buffalo, New York to Hawaii, and where they were able to show people like where are we at on this journey? So really gamifying it a little bit? Yeah, I think that’s a good way but when you have a clear vision, you can attract and retain top talent. You also have to invest in that talent. You can’t be afraid to spend money to bring talent in, right? You need the best of the best. And then how do you keep them, and you keep them through good leadership involving them. One thing you have to watch out as a, as a founder leader is getting out of their way sometimes like, again, if you’re a problem solver, you want to jump in, you can’t solve problems for everybody, you have to ask the questions and help them solve the problem. If you’re going to build a great business.

Tim Ulbrich  35:28

let me ask you a question. I think when probably I’ve never asked you before, but when I think of your journey, it really feels like the point you went to pursue your MBA went back to college. And I remember speaking of role models, I remember at our old house, you guys don’t live there anymore. I remember you at the computer in the living room, you know, going through the application process, doing pre-reqs that ultimately led to the MBA program that led to other opportunities. But that really feels like a transition point where you said, Hey, I’m going to really live my life versus, you know, this being defined for me, and I’m going to really take some autonomy and ownership of the next step, the next phase. And I’m just curious of how you arrived at that decision, right? Because that was an investment of time, it was an investment of money. And to be frank, it has to take some level of humility, because you have how many years of business experience and now I have to go back into a classroom. And I know you went to an executive program where there was more experienced individuals, but you and I both know that a lot of people go into an MBA program with zero experience, right? You had the experience. So what made you say, Hey, this is a skill that I need to acquire, this is a degree that I need to acquire. And that ultimately led you to pulling the trigger and making that decision. 

Tom Ulbrich  36:42

so I felt, excuse me, the, excuse me, the, it actually was a it actually was part of a journey. So multiple times, I started back as early as my mid 20s to go to school. I was gonna go back and become a teacher. I did a lot of coaching, like some significant coaching for a long, long time. And had lots of times that I was if I look backwards, right, it was a journey like gait gaining the courage to step forward. And where the transition point was, it was right when you were in college, because at that time, it felt like we had got our children to a point where they’re going to be okay. And I could now invent and do this. So the MBA was probably it. Why the MBA? The MBA was really more about credentialing, I guess, similar to a pharmacist getting a license. And it might have been a little bit of impostor syndrome, to be honest with you to feeling like, I don’t have something that says I have all this business experience. And in order to be a successful politician, or whatever it was, the next step was going to be I felt like I needed to credential myself at some level. Little did I know that that journey was going to be so much more than credentialing. To be exposed to other people that thought, like I did, felt like I did that were on these journeys. To do whatever they were in, quite frankly, I learned a lot. A lot of people my class were on that find that straight line journey that you talked about. And it was just another step. And I learned, yeah, I don’t think I want to do that I want to do I want to continue to have that freedom of doing my own thing. And what was unique about UB, UB hired me as a clinical professor with the understanding that I had this ecommerce business, and that I would continue to run that ecommerce business. Yeah, because it was a clinical contribution variance. Yeah, experience to what I was doing it, you know, in the classroom.

Tim Ulbrich  38:42

So let’s talk about the e-commerce business. You know, we talked about the family business. So if listeners are curious, it was Ulbrich’s Tree Farm and then Ulbrich’s Tree Farm and Garden Center, that my grandfather started that my dad and his brother took over. Ultimately, you started in ecommerce business called Mow More Landscape Supplies. And let me paint the picture for our listeners. Because this goes back to role modeling experience. I remember, in our old home, I probably was, I don’t know, eight 9, 10, something like that, maybe a little bit younger, a little bit older. I remember I can see the carpet in the basement, I can see in the back of our basement where there were storage area, you had built shelves, that you had white index cards, I see the black Sharpie, that was the inventory for the distribution of the business. I can see the desk where you would do the financials, and eventually that would go into a warehouse and what you created in the business became a much, much bigger business. So why start that business? And how did you come to realize that that one in particular, was an opportunity? Oh, and by the way, I’m going to take this on in addition to another business I have, and I’ve got a young family that I’m raising. 

Tom Ulbrich  39:55

So I think one of it was seeing an opportunity. So we started the business or was related to the garden center business, we had a large landscaping business, we were buying so many parts to repair our mowers and all of our equipment, I decided to go directly to manufacturer to try to save some money. Was successful in negotiating with them to buy some parts and parlay that into selling those parts to other people. So it started, I remember that, you know, if your mom was on here, a lot of this was, thanks to your mom’s hard work. 

Tim Ulbrich  40:26

And I remember that, too. 

Tom Ulbrich  40:28

Yeah. But the first catalog you created, we can’t create a catalog on a typewriter in our basement stapled together, and was really successful for that. So that grew, we ran it out of the house until it got big enough that it was disruptive to the neighbors. And quite frankly, it was a bit unfair to the family business as this is growing. So I sold it to the family business. And we grew it then within the family business. I bought it back years later, and then we exited it back in, in 2019. But that started out of the thrill of building something, seeing the opportunity for it. And the energy came from just building something, like it was fun. It was an opportunity. It was a way to make some extra money. And you know, along the way, as I as my journey increased, really your mom ran that business if I’m being honest. Once I went to University of Buffalo, she managed it, ran it with the team. And until we were able to exit, I had some involvement in it, but not on the day to day. But there’s another example right, the founder, the founders gets excited starts, then walks away and goes and does something else. So that backs up your other other part of our discussion.

Tim Ulbrich  41:47

Well, thankfully, mom’s an implementer. So there’s a good, good and a sustainer. So there’s good, good connection there. Do you think it was fair, as you look back on that. You said that you started this, you had the idea. You felt like hey, there’s some rub here now with the family business. So you sold it to the business to then come and buy it back? Which I’m assuming you buy it back at a premium and then you grow it and eventually sell the business. Like, as you look back, like was that fair? Or? Or was that just some of the dynamics that were there with the with the family business? 

Tom Ulbrich  42:23

No, maybe a little dynamics, but I think in the big picture, it was fair. You know, I think the discussion with my dad was and actually he helped started, he invested in it. 

Tim Ulbrich  42:34

So cool. 

Tom Ulbrich  42:36

He was supportive of it. I borrowed $10,000 from him and paid it back over three years. That’s how we started the business. But I think it grew to the point and in all fairness to him as the leader of the family business, right. I think the rub was or not rub, but the question was, are you know, you’re taking a salary from here, you’re doing that and taking a salary from there? Is this fair to the rest of the family? And I think the answer was, was getting big enough that the reality was it probably wasn’t fair. So the discussion was, you can pack you can either come here and do this. Or you can leave, you know, and it wasn’t done in a negative way. It was just like, here’s the options. And so I went back and said, Well, how about, we fold it into the family business? And and that’s what we did. And so I don’t think it was unfair. Looking back, I think the entrepreneur in me wants to say it was unfair, like, why can’t I do all these things at the same time, but thinking as a leader of a business, I would certainly hear if I had somebody moonlighting, building something, there’s going to be a point where it gets big enough that I’m like, are you really doing everything you need to do to do your job? Well, so not unfair at all.

Tim Ulbrich  43:50

That was exactly the thought I had, there’s a combination, right? If someone’s looking at this, like as an investor, they would say like, No, Tom, it was your idea. Like you’re you, you were working your butt off, you came up with the idea. But if you think about as a leader, if you think about as a family, you have to put all these factors into play, right, when you’re making these decisions.

Tom Ulbrich  44:06

You do and I had the option to take it off on my own right. Yeah. So that was one of the options was to just go down that path and grow it. But what happens again, safety plays in, right. So that’s a safety decision, what would have happened if we would have taken it off on our own? I don’t know. But I know we were scared. It’s not big enough yet to give us a security back to our security discussion, right? And building up that courage over many, many years to step out on your own.

Tim Ulbrich  44:34

Which is interesting, because you would then take those experiences, right? You live this for two decades plus, and you would then apply and implement those and coach hundreds, thousands of entrepreneurs in their own journey as they’re as they’re navigating some of these things. So there’s the direct influence and impact from business. There’s the indirect and obviously you’re doing it and leading an organization right now. I’m curious as you look back now, you know, making the decision to work for the family business. Right? Ultimately, you’d kind of pivot made mid-career. But if you go back to those those first couple of decades making the decision to work for family business, that you then ended up starting your own business. As with all family businesses, there’s challenges that come into play. Right? So as you look back at that journey, like, would you do it all over again?

Tom Ulbrich  45:20

I think so. There’s pieces I’d like to eliminate for a bunch of different reasons, the struggles part of things. But looking back of who I was, at the time, I wouldn’t be who I am today without all those experiences. And sure, I could go back and say off, I would have went to get my MBA when I was younger, but a whole bunch of things can change. But would I ever have learned all the pieces that make me who I am today? And the answer is, probably, well, not probably the answer is no. I’d be a very different human being. And the truth is, I would probably be because of the safety factor, have been stuck in something I don’t like to do. So this has been a long journey. And you know, God works that way, sometimes. That you have to learn, you got to put your time in, and maybe mine’s longer than most people. But I’ve never been happier than where I am today. And I feel like all those little pieces of making this world successful today, and enjoying what I do, came from all those struggles and all those learnings, all the good and bad when you went through. And if you wouldn’t went through them, you wouldn’t have the skill set that you have today. 

Tim Ulbrich  46:40

I love that because I think sometimes when we make pivots in our careers in our lives, we run the risk of throwing out the experiences of where we’re going into the future. And I think so often the story is, you know, one that you’re sharing right of, hey, you know, sure, could this have been different, or I would have loved it, this went smoother, whatever be the case. But those experiences journeys, led to the moments that are here led to the development, the resilience, all the skills that you’ve learned along the way that are allowing you now to do the work that you’re doing. So I think that’s a great, great reflection. I want to come back. We talked a little bit about this. But Mike and I both started in very traditional career pathways, and now are both in entrepreneurial career pathways. So Mike, I alluded to this earlier, graduated as an industrial engineer, went into corporate finance, very successful, ended up leaving that work at the time, he was living in London, doing some international banking work, just had my niece, Annelie, decided they were going to move from London back to Buffalo without a plan. And he just kind of knew, hey, this is a point we need a pivot, ultimately would lead an advanced manufacturing company for several years, and then has since launched out to have a successful consulting business. And he also owns a business as well. So he’s got a couple of different things there. So went from a very traditional pathway to a non traditional, you know, my story is somewhat similar as well, starting in a very traditional pathway of pharmacy, you know, I’m still connected to the profession, but in a in a very indirect way, having an impact and in a way that maybe I didn’t necessarily think at the beginning. So as you look at that, from your experiences, and kind of where we’re going and you think about your own journey, we’ve talked about safety, like, does that scare you as a father? Does that excite you? Like, what, how do you think of that?

Tom Ulbrich  48:30

There’s times when it scares me, there’s no question, right? And I think there’s that safety baked in as a as a parent, right? Like, you want to make sure everything’s okay. But if you look at the, the, the person, you and Michael as a whole as an individual, and you look at the happiness level, and you know, even when there’s struggles, you’re doing things that you love to do. So it’s actually quite interesting and rewarding for me to watch it. I can’t speak for your mom she might be a little bit more nervous, but I can it’s fun to see that entrepreneurship as part of your lives in your you’re experiencing some of the struggles, but a lot of success from it. And I think about you, I know you’re you know your your time with family and everything and the flexibility that comes with being an entrepreneur, you would never have in a traditional career. Right? And I know you work really hard, but your your work when you need to work and you build time in to support the family when you need it. So I think seeing you do what you love to do is the more rewarding part, even though it can be scary at times, like Is everything okay? Is everything gonna be okay? But luckily you both have done fantastic jobs and with your businesses that are doing, you know, great work as well as seem to be loving what you’re doing. So it’s not, it’s rewarding at this point.

Tim Ulbrich  50:02

I think one of the hardest things I think about this a lot with the boys is like, how do we hold the space to not project our desires onto them, whether that’s a desire of safety, or, you know, it’s easy for me to project, my interests, my skills, but to really try to see them, each uniquely and individually, so hard to do. So hard to do. And I think that, you know, not projecting our desires. What we determined success may or may not look like, is so hard. But I know one of the great joys that I have, is whether or not the boys decide to pursue entrepreneurship. I don’t know, like, if it’s for them, great. If it’s not, that’s fine, too. But there’s a thread that you can see across generations, which is so cool, right? So they’re not in the house with you. But the behaviors, the skills right are being transferred from the role modeling that I had, and now the role modeling that I’m giving them the good and the bad, you know, it’s something I often think about that they hear Jess and I talking about business every day, and I’m trying to be careful about, you know, that that’s not just complaining, but they also hear the wins and the successes, and hey, this happened and this transformation with a client, and this happened with a team member, the highs and the lows, right? Because I think that I don’t want to give them an over glorified image of it. I don’t want to give them a gloom and doom, you know, vision that what it could be as well. 

Tom Ulbrich  51:23

Yeah, I think holding space for we were talking about this the other day, you and I were talking about this, is holding space for the individual gift that God made in each child, right, is really important. And it’s something I very much appreciate in today’s parenting, it seems to be much more thoughtful than, than we were parenting is like thinking like what makes that person unique? What are they truly interested in? What, what jazz’s them, what gets them excited? And also what are the things that maybe are going to derail them because of their personality and the people they are. But I, I really appreciate that, that thought about giving kids space to be who they are. But you also hit on something like many things, and I’m not an expert on all these but many things you can look back and you can see there’s generational like generational curses, generational blessings, 

Tim Ulbrich  52:20

Totally. 

Tom Ulbrich  52:21

You look back, like in our family. There was it goes back even further. So your grandpa’s dad, so your great-great grandpa, he actually worked for American Airlines. But he was very entrepreneurial, he was an intrapreneur within the industry. So that’s another thing you can do. Right? You can be entrepreneurial within a bigger business. He was at the very, very early stages of flight and worked his way from sweeping floors to being the lead of all mechanics in the country at one time for American Airlines. So and very, you know, in aviation was like this new industry…scary. Nobody wants to do a plane, planes used to fall out of the sky sometimes. Right? And prior to that, on your grandmother’s side, so your great-grandmother’s dad was an entrepreneur and had a giant jelly factory. 

Tim Ulbrich  52:28

Brinkman’s Jelly.

Tom Ulbrich  52:51

Brinkman’s yeah. So it, you can see it and I’m sure it goes back earlier than Yeah. So I think role modeling back to yes, that happens. But I think it happens more frequently than we see. And we’re not forcing that role modeling. It’s people wiring to it, right, it’s a young mind, seeing it, wiring it and normalizing something. So your life would be really scary to some other kids that were brought up in a very traditional family with so they’re going to be even more risk averse. I don’t mean traditional family, I mean, traditional career path, right? Where dad goes to work, mom goes to work, they work 8:30-5 o’clock in a big company, whatever it is, where your children are seeing, there’s another way I can do things too. So it’s likely they will do something creative or entrepreneurial, I would say. There’s probably a high propensity and part of their journey back to 50,000 chunks of experience might be that they work in industry for a period of time. Yeah, they may always have that itch. Want to go do something else and they’ll see an opportunity and they’ll you follow it.

Tim Ulbrich  54:32

So let’s shift gears and talk about some financial aspects. After all, this is a financial show. And I’d love to pick your brain, you know, as relates to your own financial journey, I think a lot of wisdom to share with our listeners. And one of things I want to start this conversation with is we often talk about the importance of striking the balance between saving for the future, right planning for retirement, taking care of our future selves while also living a rich life today and I know as someone who’s a saver and he does a good job of thinking about the future. You know, there is that balance for you. And I think that’s something you’ve probably been working on throughout your career. And so my question is like, how have you approached that balance? And like, as you think about this for you and mom, like, what does that rich life look like? What does that mean to the two of you?

Tom Ulbrich  55:17

Yeah, that’s, that’s a hard and interesting question. The, yeah, the fact is, I think you can get caught up in the extremes of both like, not understanding finances, and maybe never saving for anything and living paycheck to paycheck. And you can go the other extreme, of over saving, if that’s such a thing, you’re the financial experts, over saving and never having life experiences with your family, with your spouse with that, and also never having the thrill of philanthropic giving, and supporting other things, with your money, depending on what you what you personally believe you should be doing with that. So we I think we found a good balance, I’m not gonna lie, I still think we’re fine at this point in our lives. But I’m always thinking like, man it’d be nice to have a little bit, you know, bigger nest egg, a little bit bigger nest egg. But I think we found a really good balance many years ago, of starting to make sure we created experiences with family, your mom and I, you know, we do stuff with all of you, right? We try to create those experiences with family vacations. We also do vacations on our own to be a way to recharge, to spend time with each other. And we do a significant amount of that, we do, you know, some philanthropic giving, that we think is really important, supporting causes that are important to us. But I do think finding that balance is important. And I’m not sure, I think where are you find that I believe it’s just like the other topic we’ve been talking about. It’s a learned skill that can be taught. But it’s probably modeled and learned because one of the things I have noticed is, human beings all have a different relationship with money. 

Tim Ulbrich  57:04

Totally. 

Tom Ulbrich  57:05

And a lot of it is what they experience, if you grew up in poverty, you may be really, you know, risk averse about spending money, or you may be the opposite. I’m going to spend everything I make because I saw somebody lose it all, or I live with nothing for so long, I want to make it up. And you know, a great example, this is your grandmother, or great-grandmother lived through the Depression. So her dad was the Brinkman’s Jelly, lost everything in the stock market. And to the day she passed away, if she had a cup of tea, she would reuse the tea bag two or three times because that was how she was wired. Like, why would I waste this when there’s still something good in it, and I think those are situational, they’re how you grow up. But again, financial literacy and education, and the work that you’re doing, and the work that people are doing that, or, um, you know, listening to this super, super crucial that we understand how we’re wired around money, and the pros and cons of our genotype or whatever you want to call it, that that is who we are around money. But back to us, I think we found a good balance, you know, now we’re thinking about the point will come time soon, like, how do you spend it down? Yeah, and how much do you want to pass on to the next generation, but, you know, all those decisions, and I think for me, that’s more the hardest part gonna be. And I think that’s where your company or your business’s type of work, I believe where you really earn your money is probably working with people that are spending money down because that can be complicated. What go, what do I spend first, how much can I spend, I’m gonna run out of money, you know, all those type of things. But I it’s a real thing, right? people’s relationship with money. And it’s all very different. I don’t know it to be a fact. But I can imagine it can be very stressful in a relationship too. If you have people that come at, if their relationship with money, as a child was very different than that mean, then coming trying to manage finances together. So important work you you all are doing in your company. 

Tim Ulbrich  59:19

I’m so glad you mentioned the relationship with money. You know, it’s, it’s until we get real with that and honestly, self reflect what is our relationship with money? How healthy is it? Where did the behaviors come from? Does it cause anxiety, fear, shame, guilt? Do we have an open hand a closed hand without judgment as soon as we can actually understand and assess that we can get real with the financial plan? Because as much as we want to say it’s all objective X’s and O’s. It’s not. It’s not. I mean, that’s all important. Of course it is. But there’s so much behavior, so much emotion, so much learned experiences. Great-grandma’s a great example. It didn’t matter if she had $100 in the bank or $100 million in the bank. She was going to reuse that tea bag, right? The objective numbers didn’t matter, like and we have to think back to what was the dinner table experience, like, you know, what were those and we can’t change those experiences and the things that were great, we take gratitude for the things that weren’t, we can take responsibility and make changes for. But that’s where we start to learn these behaviors that really impact how we relationally connect with money. And the better we understand that, especially when you’re doing this with a significant other/partner/spouse, the better we can start to make progress and doing what we’re talking about, which is finding the balance of the objective side of it and finding the balance on the emotional relationship side of it. And you might not know this, but actually there’s a book called Happy Money we’ll link to in the show notes. There’s a researcher PhD that that’s what she does, she researches the connection between happiness and money. And what the research has supported is the connection, is there really on two things, on giving in on experiences. And when I think about what you and mom have done really well, it’s those two things. You have an open hand and a philanthropic mindset, right. And I think it’s natural that when you have an open hand, and you’re willing to give, you know, I think that you look at the rest of your financial picture in a different, in a healthier way. And when you look at experiences, right, those are memories, you talked about, you know, we take an annual trip as a family to the Finger Lakes. You know, next summer, we’re looking at a trip to Norway with a group of all of us, you and mom go on several cruises a year, you’ve done that, since we were, you know, in middle school. So like, I think the experiences and the giving are key components of the financial plan. And we really want to build the plan around to support those areas, if those are areas of goals for the individuals. 

Tom Ulbrich  1:01:42

That’s interesting. Two points you make that I think are super important is we forget about the motions part of my right, we want to do the X’s and O’s. But also when it comes back to parenting, if those two are really, really important, right, those two things, when it comes to parenting, we have to teach our children that really, really young, right? Like how do we teach our children that giving’s important? And there’s a bunch of ways that you all talk about how you do that. How do you teach that it’s healthy, to invest in experience, experiences that create memories, and it’s also healthy to save. And it’s not all one or the other. It’s all those aspects of what a successful money plan looks like. An even if we’ve talked about this month ago, but even decisions like what type of car you’re going to buy, like, you know, I often once in a while I get this itch, like I want to buy this really, really nice car, mom will say you really want to drive around in a car that’s cost more than people’s homes? And I’m like, no, I don’t want to do that. But t’s okay, if somebody does want to do that if they have the resources that that that is really an individualized decision, all of those decisions. And I think we have to be careful not to pick on our whole pigeonhole ourselves into it’s one or the other or the other. We’ve also seen people be philanthropic to the point that they’re, they’re punishing themselves. 

Tim Ulbrich  1:03:09

That’s right. 

Tom Ulbrich  1:03:09

They can’t, they can’t do anything because they give it all you know, they want to give everything away because it really jazzes them, but they don’t think about what their personal needs are, what other needs are, what long term needs are.

Tim Ulbrich  1:03:22

Yeah, and I think what I’m hearing there is individual. I think so often when it comes to finances we’re, we get caught up whether we know it or we don’t know it and kind of what other people are doing, and really evaluating like, what do we want? What what are the things that are most important to us, not what other people say we should be doing? What do we actually want to be doing and Ramit Sethi in his book, I Will Teach You To Be Rich, he, he talks about this as money dials. So find the things that really mean a lot to you and derive significance. And like prioritize them, dial them up and find the things that you don’t care about, that you’re maybe spending and dial him down, right. And for some people, the dial up might be a car, for others, it might be a dial down, right, everyone’s situation is different. So I love that. Let’s talk about pursuit of retirement. And I think this is interesting, because we just, we throw that term around. And for whatever reason, I think as a society, you know, people if you ask, Hey, when are you gonna retire? 62, 63, 65, right. And that’s kind of a vision they have it’s, it’s sort of this idea, this number, this age that we’ve just thrown out there and we kind of blindly accept. And again goes back to the individual aspects we’re talking about. But when I think about you, right, it’s someone who’s healthy, who enjoys their work, who has the flexibility within your job to do the things that mean the most to you. It really challenges that idea of retirement, like how are you thinking about the next stage in retirement? 

Tom Ulbrich  1:04:53

It’s interesting, because the world does. I think think like this magic number is 62, 65 years old. Again, I think it’s what I’ve learned it’s very, very individualized. Some people have to keep working, because they have to. That’s not my circumstance. I keep working, because I love what I do. And I imagine, I can’t picture the word full retirement, like not doing something everyday. So I don’t know what that means. But I know that at 64 years old, I’m not thinking of even thinking of leaving Goodwill for another four or five, six years, assuming I stay healthy, because I love what I do. And what’s also is really important. Your mom’s retired, but she supports me in what I do and my passions, and we work that out. Because I think sometimes that could be a challenge for couples, right? Yeah, one person’s retired wants to do this, and that, I’m fortunate to have a job, they do have a lot of flexibility in. Significant vacation time. And the most important if you work for somebody else, I have an incredible, we’re nonprofit. So I have a board of directors is my boss, an incredible nonprofit, that we talk transparently about who I am as an individual, what the goals are the company, for the board of directors, what my goals are, and they lean into other things I want to do. So I recently went to them and just went to the chair of the board and said, I thought about leaving to do more consulting, but like, why do I want to do that? And I asked myself, why do I want to go into consulting, I used to do it, I enjoyed it. The reason I wanted to do it is I miss that interaction with entrepreneurs and problem solving. And I found an outlet with that, and the board supported it. So I created a LinkedIn newsletter and launched it and I talk about entrepreneurship. And I talk about social innovation. And I have got so much feedback from people that said, I had you in class or I worked with you that is feeding that part of me that I was missing. So I hate you know, I don’t want to yeah, I don’t want to oversell, you know, I don’t want any of you coming for my job, but I got a really good, I got a good gig, that works for me. And I’m not I am not putting a date on retirement. If it’s not fun anymore, if it’s too challenging, if there’s a health situation, there’ll be a different discussion. But for now, I’m taking that word off the table. I’m gonna live and create, you know, maybe do more experiences, maybe take a couple extra vacations, we try to get down, you know, away to see the boys and do things with the girls. All that’s important. And I think retirement would afford more of that. But not enough to walk away from a job to just think you’re going to do that full time. Because we’re not.

Tim Ulbrich  1:07:49

Yeah, and not everyone right is lucky enough to be in a position where you love the work that you’re doing. And you feel a sense of contribution, right? Because we know I mean, it’s pretty darn clear. Like, you’re getting out, yeah, you’re working, you’re getting paid, but you’re getting a lot of intrinsic value because you feel like every day you’re making an impact and contributing, whether that be to the larger organization, whether that be down to the store level because of the efforts that you’re doing. Whether that be because of the impact you’re having of other entrepreneurs, or leading their staff, like if you just pull the plug on that, because of this illusion of like, I want to retire and do my own thing. We often underestimate what a gap that can be a contribution that you’re making, right? So I think there’s just a ton of wisdom in what you’re sharing there. And really making sure again, going back to the individual aspect, like what do you want, what provides value Oh, and by the way, you’ve put yourself in a position financially, that if something changes, whether that be health, whether that be something with the organization changes, something where you’re no longer, whatever, you have a choice you can make. And I think that that’s such a message we try to convey to our listeners that you want your financial plan to be designed in a way that gives you options, choice and flexibility. And that takes time and hard work. You’ve saved for a long period of time. But you now are in that position of choice as long as it’s going how you want it to go. You keep doing what you’re doing. But if something changes, that’s okay. Like you’re gonna be okay. 

Tom Ulbrich  1:09:18

For sure. And we’re, it’s certainly nice. I’m sure there are people that are trapped because they they didn’t plan successfully, right and or maybe even trapped and have to work longer. That’s not our, my position. You know, I’m fortunate that I could walk out today and we’re fine. Everything’s fine. But that did come through lots of planning and in you know, when we talk about financial planning, it’s not just about money. It’s about other things like health care and long term care and all those type of things that build safety nets around you are things that are getting probably very individualized to what the needs of the person is or what they feel safe around. But, but we’ve got all that. So we’re in a spot where we we could, you know, just stop which which that freedom allows you to really dive in deeper into what you’re doing. Because you’re not worried about all I have to do this or that, to sate to make sure I keep my job or, you know, I don’t want to do something that that might push the envelope a little bit. Because I can’t afford to lose my job and that and being surrounded by people that support you is really, really critical. 

Tim Ulbrich  1:10:31

Yeah. Well, this has been a joy. And by far, not even close, I mean it, that my favorite episode we’ve done in 363 episodes, so I can’t wait for this to get out to the community. I know. It’s one that I’ll be able to go back and listen to for some time. So thank you so much, Dad, for taking the time. I love you and appreciate you sharing your journey with us. 

Tom Ulbrich  1:10:53

You are welcome. I love you too. And Happy Father’s Day. The that will be here in in a day or two. Right? It’s coming quickly. So thanks so much. Appreciate having you again. Love you say hi to everybody. And we’ll chat again soon.

Tim Ulbrich  1:11:12

We’ll do and for our listeners if you want to connect with my dad, we’ll link in the show notes to his LinkedIn profile. Make sure to check out his newsletter as well. It’s great stuff. So thanks so much, dad, take care. 

Tom Ulbrich  1:11:22

Take care.

Tim Ulbrich  1:11:25

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

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YFP 359: Pharmacy Innovators with Jamie Wilkey, PharmD


Dr. Jamie Wilkey shares her entrepreneurial journey of building and selling a business on this episode of the Pharmacy Innovators series hosted by Corrie Sanders.

This episode is brought to you by YFP+.

Episode Summary

In our YFP Podcast Pharmacy Innovators with Corrie Sanders series, Dr. Jamie Wilkey joins Corrie to discuss her entrepreneurship journey, emphasizing the importance of thinking big, pushing boundaries, and utilizing education to achieve success. Dr. Wilkey shares her journey of transitioning from a community pharmacist role to building a successful pharmacogenomics practice, highlighting the importance of validating ideas, leveraging scrappy methods, and empowerment through helping others. Dr. Wilkey also shares her experience with selling a pharmacy business and valuable insights on their professional journey, emphasizing the importance of adapting to the changing landscape of the pharmacy industry and embracing digital business ownership.

About Today’s Guest

Dr. Jamie Wilkey is a PharmD who loves what she does and brings passion and happiness to the pharmacy profession.

Jamie has had a varied career from working retail pharmacy, to owning, scaling and selling her own company, and to working as a consultant for top universities and companies. Jamie is optimistic about the future of pharmacy and knows great things are in store for those pharmacists who are willing to push boundaries, to think big, and to use the full extent of their education. 

You can find her happily living debt-free with her 4 boys being outside as much as humanly possible and enjoying Utah’s National Parks. Or reading. A lot.

Key Points from the Episode

  • Pharmacy career paths with Dr. Jamie Wilkie. [0:00]
  • Building a pharmacogenomics business as a side hustle while working full-time as a pharmacist. [2:27]
  • Entrepreneurship, pharmacogenomics, and career transition. [9:11]
  • Transitioning from pharmacist to content creator, with insights on building a business with vulnerability and transparency. [16:19]
  • Selling a business after two years of growth and scaling. [21:34]
  • Selling a pharmacy business, including the importance of mentors, due diligence, and a clean break. [26:32]
  • Adapting pharmacy businesses for success in today’s world. [31:40]
  • Embracing growth and personal development as an entrepreneur. [36:18]
  • Various income streams, including coaching, teaching, and pharmacy work. [39:40]
  • Entrepreneurship and pharmacy practice with a focus on finding joy and success in the field. [42:39]

Episode Highlights

“And so it was really cool seeing that, like it’s not the smartest person or the most qualified person who can build their own thing.” – Jamie Wilkey [3:47]

“Saving gives you such a buffer. And I really think it’s kind of a secret sauce for succeeding in entrepreneurship. When you don’t need your business to turn a profit the next day and aren’t white knuckling it saying, I have to have a paycheck by the end of this week. It becomes more fun and a creative pursuit like a hobby that I’m going to figure out. But I’m also going to get paid too. And it’s so different and so fun.” – Jamie Wilkey [16:57]

“In a way being vulnerable and saying like, I hate retail, I gotta get out. And I’m passionate about precision medicine so I’m doing this one way or another, makes it easier to jump on board because people can see themselves in you when you’re first starting.” – Jamie Wilkey [18:57]

“Just start, just do the thing. Put yourself out there, start solving a problem in the world and don’t overthink it. Put your energy into action.” -Jamie Wilkey [31:42]

“I feel like it’s riskier just to stay in your job with no other revenue options than to build something on the side a few hours a week and think in terms of years and decades rather than needing a quick buck tomorrow.” – Jamie Wilkey [33:29]

Links Mentioned in Today’s Episode

Episode Transcript

Corrie Sanders 00:00

Hi YFP Community. Corrie Sanders here host of the Pharmacy Innovators segment of the YFP Podcast. Pharmacy Innovators is designed for pharmacist navigating the entrepreneurial journey. In this series we feature stories and strategies to help guide current and aspiring pharmacy entrepreneurs. Today we have Dr. Jamie Wilkey, a PharmD who loves what she does and brings passion and happiness to the pharmacy profession. Jamie has had a varied career from working in retail pharmacy to owning, scaling and selling her own company. She also works as a consultant for top universities. Jamie is optimistic about the future of pharmacy and knows great things are ahead. For those pharmacists who are willing to push boundaries, think big and use the full extent of their education. Today, you can find her happily living debt free with her four boys and being outside as much as humanly possible while enjoying Utah’s National Parks. I’m excited to share so many points of growth from Jamie’s optimistic perspective and hope you will find this episode to be inspiring from not only the lens of pharmacy, but how Jamie’s attitude and perseverance has served her work life balance. Please welcome to the podcast, Dr. Jamie Wilkey. Jamie, welcome to the podcast. We’re excited to have you here.

Dr. Jamie Wilkey  01:10

Thank you, Corrie! This is gonna be so fun!

Corrie Sanders 01:13

And I know that you’ve done a lot of podcasts in the past, you have a very public content platform. So we won’t go too deep into your background. But for those that don’t know you, why don’t you just start with briefly describing your path in pharmacy with school and training and any additional certificates you might have.

Dr. Jamie Wilkey  01:29

Sure, Cory, so I grew up in Wyoming. So I went to University of Wyoming pharmacy school, which was one of the best decisions I ever made, graduated as a 24 year old and I started making a six figure salary. And I was like over the moon like, this is why I went to pharmacy school. So I could be a girl with a doctorate degree earning like $130,000 a year and not have a career ladder. I could just do that and go part time when I had kids. And so that’s what I did. I worked full time for a few years. And then I ultimately had four little boys. Two years apart, bam, bam, bam, bam, bam. And it really helped to have a pharmacy job where I could just go part time during all those years of having babies and toddlers. And so I worked part time for many years at Walgreens. Ultimately, after 10 years, I had still been at Walgreens and I felt like, Oh man, this job that I thought was like so perfect. And it really did serve me well for a decade. Ah, there’s no career ladder, there’s no growth. I’m like on the hamster wheel doing the same thing. And I’ll probably keep doing it for another 30 years unless I change something. And so Corrie, really the thing that changed my whole career was just getting on LinkedIn. Until then I didn’t even have a LinkedIn account. In the summer of 2020, I created an account to look for a new job. And once I saw other pharmacists on there, like doing their own thing, not just working retail, hospital, or as an MSL, it felt like I was coming out of a dark cave into like the light of potential. And it was just so exciting to me to see that like, oh, I don’t have to rely on getting a new job or getting more certifications to build a dream life like, these other people are doing it themselves. I’m gonna jump in the race, I can do it too. I have no idea what I’m doing. But clearly, like your future is determined by you. And I want to just try my hand at it. So I just got on LinkedIn and started writing on there everyday kind of documenting, like, what the heck I’m doing like, here I am this retail girl, I have no residency, no fellowship, no certifications, I’ve literally just been clocking into a job for a decade, and only doing CEs required to keep my license like, I loved my job. But I was not overly engaged in being a pharmacist. And so it was really cool seeing that, like it’s not the smartest person or the most qualified person who can build their own thing. It’s just the person who thinks they can. And so also I saw the pattern very quickly that like the people who have an audience who are teaching other people who are like monetizing their knowledge in some way, are very consistent at writing online, was like, well, that’s free. I don’t know what I’m doing. But I’m like, such a nerd for habits. Like I will set a habit every single day to write online every day. So that’s what I did. And it ultimately turned into me turning into an entrepreneur, and starting my own business because I writing not only on LinkedIn, but I was like on Instagram, the only social media account I had and learning about pharmacogenomics. I started like posting to my friends like hey, did you know a genetic test, like change prescribing for the rest of your life? I think this is so cool, but I want to try this on someone, does anyone have trouble with like medicine that you want to like let me practice on? And so many of my friends raise their hands and neighbors came out of the woodworks that like oh my gosh, I’m struggling with medicine. Can you help me? That I started buidling a business before I even had a business before I had an LLC or done any of the paperwork. And so it was really cool to like validate ideas out of the gate in a really scrappy way that was totally me to just start earning money and Corrie, I tell you, once you like actually charge for your services as a pharmacist, oh, really lights a fire under you that like, wow, I just earned way more helping one patient on a zoom call, then, like a day in the pharmacy. And so it was really cool and empowering to one, see how working in a new way, like lit a fire in me that I wasn’t just like a robot, checking the boxes that I like, help people in new ways. And two that, like, what it was like to help someone and to get a raving review and like really feel like I helped their life. So once I did that, it felt like, okay, the time is ticking on my retail career. It’s been cool, but I can’t do this forever. And so I just, it was so scrappy, Corrie, like just talking to friends and neighbors reaching out on LinkedIn to prescribers out here in Utah. I built my own consulting practice where I saw patients remotely and in their clinics, and just was like a pharmacogenomic pharmacist. And how did I become that from a Walgreens girl, I got a certificate. I did like the 16 hour CE certificate like yeah, now I’m PGX certified like, it took a week. It was not hard, because we’re drug experts, and we just so undervalue our expertise. And the biggest learning you get is like by actually doing it. And by helping and people don’t care. They just know like, you’re a drug expert. If it takes you a while to figure it out behind the scenes before you meet with me, I don’t care, just help me. And so that was really cool. Okay, that was kind of long. I’ll start I’ll start to speed up now. And so as I’m like helping people, one on one, I’m also building on LinkedIn, and sharing like, all of all of the ups and downs of entrepreneurship. And a number of people started keep repeating, reaching out to me on direct messages, and like, hey, that’s, I love what you’re building. Can you teach me how? And so ultimately, like, guys, I’m still at Walgreens, because you can’t just quit your job overnight, unless you’re completely financially independent. And I’m working in the cracks on my time. And, oh, I have four kids, you know. So I have no time. But I want to teach other pharmacists this. And so one of my friends gave me really good advice. She was like Jamie, just create a little mini online course, that way you can teach people at like, their own speed, it doesn’t take your time, create it once. And just help them that way. And so that was awesome advice. So I just did and Corrie, I tell you what that first course was like, so awkward and bad. I just like got on Zoom and recorded, like 12 different lessons without like a PowerPoint or anything, it was just me talking. But it had the core of what they want it and I sold that to 11 people for $500. Like, here you go, tell me what you liked to tell me what you hated. Tell me what I could have improved. And they were really candid and honest and saying like I loved this. This I could have used more of. Don’t include this. And so what turned out is my scrappy product, then I could polish and redo like rerecord with good visuals and resources, then I could turn around and sell it for $1,000. And so that’s what I started doing in mid 2021. Started selling my online course, just through my LinkedIn posts, not like ads or anything because I still didn’t know how to do ads. Started selling that. And it grew and grew and grew and grew and grew and grew. And ultimately, after two and a half years, I’d earned more than a million dollars in revenue from that little course, which was just wild to me to see how like one digital asset can grow in value and in reach. So ultimately, we helped more than 350 pharmacists understand and build like their own pharmacogenomic practice, and it was really cool. Where do you want me to go with this story?

 

Corrie Sanders 09:11

I’m gonna I’m gonna break it down even further when I say that that was a great bird’s eye view to start with with, you know, where your training was where you spent a lot of your initial pharmacy experience, then ultimately, where you saw a gap and a need in care and how you pivoted to something that could be monetized in a sustainable working way over time. So I want to I’m going to chunk it up just because I want the audience to really learn about your mindset and the steps that you had taken at certain points during that story. Let’s start with your path to entrepreneurship in general. So it sounds like you heard about pharmacogenomics through some kind of source and you’re like, Wow, this is something that’s totally applicable to practice. And while you were still practicing in retail, you started building out a pharmacogenomics consulting company, is that correct? 

Dr. Jamie Wilkey  09:57

Correct. Yes. 

Corrie Sanders  09:59

So reaching out to different providers on LinkedIn. And then ultimately, were you working for part time at Walgreens at that point, or and you were able to take on a couple additional days in clinic? How did that transition look like between your retail position and taking on consulting and either a part time or eventually a full time manner?

Dr. Jamie Wilkey  10:18

Yeah, so I was at Walgreens mostly full time, it was probably like 30 hours a week. And so in my days off, I would see patients when I was not at Walgreens. And then when I ultimately got into a clinic, and they wanted to have me there, I just gave them my schedule on advanced and said, like, got it most Fridays, I will be here, like, fill it up with my patients on Fridays and just batch it like, I would love to be here every day. But until then just batch it on Friday. And they’re like, great, we’re happy to have you. That’s when you’re available. Patients don’t know. 

Corrie Sanders  10:52

Like you’re not there, Monday through Friday!

Dr. Jamie Wilkey  10:53

Yes, behind the scenes like we’re next available is this Friday or next Friday, when would you like it? And so it made it easier to batch things and to like, validate that this is working and see the revenue coming in. Because although it wasn’t thrilled with my Walgreens job, it still has an awesome paycheck. And it’s still a good job. And so I was not about to like just burn the bridge quit and then hope entrepreneurship works. Because I have no experience. I’ve never done this before. I do not come from an entrepreneurial family. So it’s definitely like figuring it out. But while you’re balancing a job, like a job is such a good resource to give you the safety net, to build something on the side that it felt like other than missing time watching Netflix, there really wasn’t a downside. Because I’m getting experience and learning when people said no or no thanks, like it it taught me something too. It wasn’t like, Well, this has to succeed, or it was a waste of time.

Corrie Sanders 11:46

And then at what point did you make the formal transition? So you’ve got four kids at this point, it’s not like you can walk away from a job without a proof of concept going into this new consulting journey. So at what point did you decide okay, this is it, the model on the side is now something that’s worth taking on full time. What did that breaking point or tipping point look like for you? And when did that happen?

Dr. Jamie Wilkey  12:08

Once I crossed about $75,000 in revenue, it took probably eight months. I was like, oh, okay, in eight months, I earned more than I would have earned at Walgreens over that time. So then I the next step wasn’t quitting it was like, okay, just put me on PRN, like, keep me on the books, but I don’t want to be scheduled regularly anymore. So then I would fill in like, a couple times a month like for, that’s back when like COVID clinics were thinking and like, I was still in the system for a long time just to like, keep that as a safety net. And still just keep cash flowing too.

Dr. Jamie Wilkey  12:56

Which I think that’s a great way to put it is that this now your full time job has become your side gig. And your side gig has transitioned into your full time job, and any other elaborations on what chapter of life you’re in at the moment. So when we talk to pharmacy entrepreneurs, I mean, there’s a million reasons under the sun, why you shouldn’t be making this transition or taking something on whether it’s student loans or kids or it doesn’t meet your retirement goals or your risk. If you’re risk averse or risk tolerance, whatever risk strategy that you have any other insight into the chapter of your life, besides having four kids you were in at that moment that you think was helpful in making that transition, or that would be useful to know. 

Dr. Jamie Wilkey  13:33

So at this point, we have four kids, we’ve had bought our house a number of years ago, right after graduation. And so between and my husband is working, he’s working full time. So there’s dual income, which is really helpful to get a solid financial foundation. So at this point, we had our house and we’re heavily paying it off quickly and had been maxing out our 401ks every year ever since we were like new little workers, and have a really good six to 12 month savings of both of our incomes so that like if neither of us works for the next year, could we pay for life, assuming that like we both lost our job and like, couldn’t get one for a year because I am very risk averse, Corrie. I love like stability, and I love money and I love being able to make decisions from a point of abundance rather than scarcity. And so it did. It took, let’s say this point, it’s like 10 to 13 years into my career. So it was not a new grad. I had my student loans paid off. We had no debt other than our house. And my husband has a good job. He’s an accountant. And so we both are professionals. We’re in a really good place financially because we’re savers too like, we don’t have the super big house and like all the new cars and stuff. So as savers it felt like okay, we’ve been killing ourselves off like saving and working. My next big crazy goal, Corrie, was that like, I want to pay off this house, I just want to be completely debt free before I turned 40. And I kept like crunch every time I’m at work. I’m like crunching the numbers like, Okay, how many more years at Walgreens? How many extra shifts doing overtime? I felt like okay, I could do that in five years. But after I got on LinkedIn, it kind of ruined me seeing that like, but you can also make money other ways. So I just got to try this, like, can I maybe get there faster, or in a more fun way than like physically being at that retail store. While like, I don’t want to leave my kids, especially with COVID. It made it very apparent that like, white collar workers can grab their laptop and go home. Everyone else, like you’re on the frontlines, you’re a hero and like, I don’t want to be a hero. I want to be with my kids and earn money in a new way. Because I’m kind of jealous of all, like Utah. The point of view time in it’s called Silicon slopes, because there’s just like so much tech and software development that it feels like it’s in the air that like work in new ways, do cool things. And here I am, like an antiquated pharmacy job. So it felt like I just got to a point. I just got to try. I don’t have much to lose other than nothing. There’s always a job at big box stores.

Corrie Sanders  16:19

No, and that was really insightful, insightful. I love how you shared how much savings you guys had between you and your husband and the risk strategy that you had taken on. And not only some of your already accomplishments with your debt, but what were your debt goals long term? I think that that’s so important to outline prior to making a career transition, where there’s a lot of risk involved is knowing what the backup plan is, or how much time you have before that backup plan needs to be activated. So it sounds like you and your husband had a lot of healthy conversations prior to that jumping point in which you already had a proof of concept. 

Dr. Jamie Wilkey  16:51

We’re both savers and really like yes, since this is the Your Financial Pharmacist Podcast, like truly saving, saving saving gives you such a buffer. And I really think it’s kind of a secret sauce for succeeding in entrepreneurship is that you don’t like need your business to turn a profit the next day, you don’t need and are white knuckling it saying like, I have to have a paycheck by the end of this week. It becomes more fun and like a creative pursuit that’s like, this is a hobby that I’m going to figure out. But I’m also going to get paid from, too and it’s so different and so fun.

Corrie Sanders 17:25

And I’m sure that your clientele and people that you talk with can also tell when you’re coming from a place of abundance versus scarcity, as you said earlier, like having to make that next sale versus making the next sale when it fits into their timeline, not necessarily yours. It’s such a big difference. Yeah. So the next question I want to talk about is when you made the transition, so we talked about how you started transitioning into content creation, creation for pharmacogenomics for other pharmacists. When did that happen? You were consulting for how long? And then when did you notice on LinkedIn? Okay, this is something that other pharmacists are looking for. And I’m gonna start now doing this on the side, in addition to consulting, what did that look like?

Dr. Jamie Wilkey  18:05

Probably be like between three and six months. 

Corrie Sanders  18:07

Oh, wow. 

Dr. Jamie Wilkey  18:08

So it was still pretty fast. So it was still new ish. But I think that’s part of what made it work was like, I’m new with you. But I figured out the next three steps, and we’re doing this together, and I never wanted it to be like, I am the best. I know the way I am perfect. More like, here’s what I’ve learned, here’s general principles. Now, within this program, we’re all coming together. And we’re all precision pharmacists. And we’re all going to help each other and teach each other because there’s not only like one way to do something, what works for me in Utah may be different for someone in Arizona, and like we’re pooling knowledge and pooling resources, rather than, like, I must have everything figured out. Because I think that’s what stops a lot of pharmacists like, until I know everything and I have X amount of experience that no one will help me. In a way being vulnerable and being you and saying like, I hate retail, I gotta get out. And I’m passionate about precision medicine. So I’m doing this one way or another, like, makes it easier to jump on board because people can see themselves in you when you’re first starting.

Corrie Sanders 19:12

And I think that’s something I’ve always respected about you is the amount of transparency that you share with your audience and with the academy is, I’m not here to tell you I know every answer, but I’m here to tell you that I’m going to work through this with you. And I think that’s such a better business model than preaching you have all the answers. So I love that it’s so much more relatable with that transparency comes a lot of relationship and building abilities. But I just love the line that you said I’m here to learn with you and I’m here to learn alongside you and help you get to the same end goal. We have a similar goal in mind. So what did it and that was Arches, LLC is the LLC that you eventually started. What did Arches look like over time? So you start with just 11 minute video or 11 short videos, and then you started putting out more visual content, you started growing the audience? And did you eventually start growing employees? What did Arches evolve into over the next couple of years?

Dr. Jamie Wilkey  20:09

Yeah, so for the first year, it was just me. And then I hired my first VA – virtual assistant. Because being married to an accountant, I know all the details of like employees, and how complicated an employee could be. So I, I, we never did hire an employee, it was all contract work. And especially it was really just me, I hired one VA, it was a good learning experience for both of us. But then I found like my BFF VA, Alexa, she’s still like my best friend, six months later as a recommendation from a friend. And she and I just like tag teamed it and went full force ahead that she really was the one who ran the company. And I got to like, be the face of it and provide the content. And she did all the back end logistics that take a lot of time. And I’m not a detail oriented person. And so it worked really well. And hiring people from the Philippines are the best because they have an amazing grasp of English. They’re such hard workers. And they’re at a price point that new business owners can afford rather than someone in the United States. And I am a little afraid for the US workforce, because everyone I’ve worked with from the Philippines is like just such an incredible human and turned into a good friend that like, it was a great way to start hiring. So it was me and Alexa, it originally started with like, just pace yourself videos of like, what else do you want, I’ll create this video. And then we created a private group on Facebook. So we had a private Facebook page. And that way, we’re like talking to each other every day. And then we’d have live weekly calls, every week, we would learn something else or have like a guest come in and speak on something that was adjacent that I wasn’t an expert in, like nutrigenomics, isn’t amazing how nutrition is affected by your genetics and have like nutrigenomics speakers and lamps come in. And so I recorded all of those and added it to the course. So  by the end of two years, there’s more than 70 hours of material in there. Wow. Which was huge. But it was also really awesome. Because it felt really comprehensive to understand like how to start a business, how to work with a lab, and giving people like labs themselves to work with and how to understand state rules and regulations. And then we started creating like documents and templates, like, here’s a whole bunch of legal forms, you’re probably going to need to start. Don’t hire an attorney for $6,000, like I had to do. Here’s a good base baseline to start with and learn that like maybe legal advice can help tweak it rather than everyone starting from scratch. So we started like pooling, like what people needed and created group resources as well. That was really fun. 

 

Corrie Sanders 22:44

That’s amazing. That’s amazing. It’s worth joining the academy just to save on the legal. At what point did you start considering selling the business? So I think that this is maybe something that you haven’t discussed on a podcast just yet. So I’m excited to dive into this. But how long had you had Arches LLC, to where you hit a certain inflection point where you’re like, wow, this is now something that I can consider selling? This is a worthwhile brand. When did that come into conversation? And who brought that to your attention? Or did you bring that to the attention of others? I want to highlight on a couple of things that you’ve said, because I think these are so valuable to the listener. And I know that these things are not generally taught in pharmacy school. So you said I am just a scrappy starter, I like to start and build things. One, definitely not taught in pharmacy school. And then maturing and scaling of a business. Also not taught in pharmacy school. Two very, very different skill sets. But you also said, you know, we leaned into mentors into resources outside of healthcare, which a lot of pharmacists we’re just so siloed into our own little bubbles, our pharmacy bubbles. I think it’s important to view healthcare and view your services through the lens of someone who is not involved in health care at all. And it sounds like that was really instrumental, especially at this building and scaling and selling portion of your business, it would be hard to find a pharmacist, I think that was so successful. But I love how you took on the lens of you know, I’m going to use this as a an internship into how to build businesses, because that will be a useful skill set, I’m sure for you in the future once you decide what your next steps are. So throughout this selling and building process, you had these two gentlemen who it sounds like you met through different networks. Who else had your best interest in mind? So did you, your husband’s an accountant, but what other resources did you use to make sure that you as the seller, were doing your due diligence and your homework and this was going to be something that was beneficial not only to your academy, but to you as well? 

Dr. Jamie Wilkey  23:19

Yeah, so it was two years in two years in, I felt like I was working with a mentor who was helping me with like webinars and how to sell and I he wasn’t actually like a person who did that, he runs a company similar to mine, except it’s for finances. And I just met him through a friend. And so he didn’t, I was like, Oh my gosh, teach me how to apply this to my program. But he wasn’t like, I’m a guy who teaches webinars. I was like, No, I saw what you did teach me how to do how to do it. So it was really cool. And after that, he just said like, Would you ever consider selling this? Because what you have is such a smooth running machine. Would you ever consider selling it? And at first I was like, No, this is my baby. I love it. But then after planting that seed, and over the next couple of months seeing that like oh man like these students are doing so well. They’re outgrowing me, because I can’t keep seeing patients, growing my own practice and doing this own business they’re two. Although it’s the same topic, two very different businesses that it felt like it’s probably the most responsible thing for this group to bring in scalable leadership because I’m a very scrappy starter, Corrie, I love like starting things and building from scratch, but I don’t like maturing things and scaling. I’ve learned that about myself. I don’t even like working with teams very much. Because ultimately, so it’s me and Alexa, and then we hired a couple of the students to help with marketing and to help like nurture the relationships in there, which was awesome, but I also found myself like, I just don’t like teams, I just want to build my own thing. You know, and so that combination of seeing my personality characteristics come through and the sustainability of what I had, and wanting to like serve these people best rather than keeping it as like my pride, like, No, this is my baby, I’m gonna keep it. I really want to do what’s best for this group. And so I told him, I was like, I don’t know how to sell a company, who do I talk to? And so he introduced me to someone in Utah, who buys and sells companies. And he was awesome, turned into a really good friend. And he helped me list the company and talk to multiple buyers and sellers. Well, I’m the seller, multiple buyers. And it actually turned out kind of funny, because right before we had a buyer who was interested and was sending a letter of intent, and he’s like, Actually, can I just buy it with my friend, and we’ll run it together. Because I’ve seen the books like I love this, can we just run it together? I was like, Cool, I’m down with that, I still want to like, learn from you and hang with this group a little bit. And so we did it. And so we sold it. And we got a third of the company like an ownership. And it was really cool to work with two people outside of health care who sure have a lot of experience in scaling companies and multimillion dollar companies. And so I consider it like an internship into like, how business is done, and how to like, really help this group and scale it in a more sustainable way than like, me just trying to like Google and figure out like, Okay, how do I do this next.

Dr. Jamie Wilkey  27:45

My husband as a CPA is really good. Don’t underestimate accountants, I think they, you can use one instead of an attorney for most business questions, especially like reading contracts, and understanding like, if you’re getting your fair share accountants, oh, my gosh. Pro tip be married to an accountant, it as an entrepreneur, like it makes your life so much easier. And unless they give you the answer, you don’t want to hear! So I had him and then I did hire an attorney to help like, broker the deal and, and make sure everything looked good. But it’s I don’t know, I’m a very stress free person. And so it just felt right. And I was like, Yeah, let’s just, let’s just do it. So it was great, pretty simple and easy. I think it took like, two weeks from start to finish from like an offer to close. 

Corrie Sanders 28:47

So did you have a certain price point in mind? Was that something that that team brought to you? Is that something that outside evaluators have brought to you? Where did the price point come into mind? And then how did you guys if you don’t mind me asking divvy up ownership of the company? 

Dr. Jamie Wilkey  29:01

So the attorney I was working with helped navigate the price point. And my husband did his own math too, and was like yep, that seems very fair. So I got a six figure payout for selling my company which felt incredibly good as well as I got to keep the cash from the company which I’d saved up a ton of into too and then we just turned we created a new entity and all three of us owned it equally and then moved to the company to that entity so as a separate entity, so I still own Arches Health as my company I just run it under a different name now.

Corrie Sanders 29:37

Got it, got it. And so what are your responsibilities with this new company? So I’m assuming that’s Wealthy White Coat is what this has evolved into. What day to day responsibilities do you have with Wealthy White Coat or when you sold the company that was a clean slate and you are now free to roam and do something completely different?

Dr. Jamie Wilkey  29:54

Well, it was an evolution. So that was a year ago, we divvied it up 30,30,30 And then this January, February, I sold my share. So now they’re running it themselves. So over the course of the year, I was still like the one talking to the students and like keeping that relationship up. And they were the ones helping put in systems and to scale and to find like, partners and different income streams. Because all this time it’s, I’ve been through like one income stream like year long membership, that is it. And so they’re helping diversify different price points and ways to enter, and how to, you know, scale and bring more resources. So I had the fun part of like, being able to just keep doing what I was doing and like, have the conversations help people and keep giving them resources that they needed. So it was just fun.

Corrie Sanders 30:49

So still being the face of the company to some extent, managing the client relations. Okay, that’s interesting. 

Dr. Jamie Wilkey  30:54

Because those pharmacists are so great, I still like they’re just the best.

Corrie Sanders 31:01

You’re like, those are my babies. So this is my baby, and you have a special connection with each of them. So that’s easy to understand. And Jamie, any big lessons along the way? So we’ve covered a pretty extensive amount of ground in your professional career to this point, we’ve talked about your transition from retail to consulting, to creating something that can be bought and sold by other pharmacists, and then ultimately selling that business. Any big lessons learned along the way or big takeaways that come to top of mind when you’re thinking about an audience of pharmacy entrepreneurs, and I’m sure a lot of them want to get to this point of success. Any thoughts or any lessons that you think are worth sharing? 

Dr. Jamie Wilkey  31:40

Yes, two! One is just start, just do the thing. Put yourself out there, start solving a problem in the world and don’t overthink it, like, put your energy into action. I know our professional is so good at like overthinking and being perfect. And trying to like get all the education so that we’re the perfect person to help but like just helping and bringing your why you’re helping set you apart from anyone because everyone else is learning, learning, learning, stressing writing a plan. And if you’re out there doing you’re gonna run circles around people, so do, do, do. And secondly, I would say strongly I love digital businesses and online businesses, because there’s just not the risk there is with a cash intensive business like opening a pharmacy, you have to have the building, you have to have the products, you have to have the staff, you have to have the insurance, like the startup cost is half a million dollars, at least versus like a digital business, something you can do with just you and your laptop. You can start I think I funded myself $2,500 from my own checking account to start, and I’ve never had to like, put money back in because it’s all been profitable from there. There’s just no risk. And it’s a lot of reward. And even if it and don’t think of it in terms of like, will this win or lose? Will I succeed? Or is this a waste of my time think of it as like, I’m learning how to be relevant in today’s world, because it’s very different than anything in the past, especially with pharmacy and those who can adapt and like meet the needs of the world in a new way. You don’t have to have anyone’s permission, go do it. And it’s just really fun. And it’s not a risk. I feel like it’s riskier just to stay in your job with no other revenue options than to like, build something on the side a few hours a week and think in terms of years and decades rather than needing a quick buck tomorrow.

Corrie Sanders 33:46

I think that’s really valuable insight. And I completely agree with you, I think that the way that pharmacy is heading, it’s going to bode well for those that think outside the box. And that take on additional business ideas or opportunities that really leverage our clinical skill set. Because I just feel very strongly with the development of technology, that pharmacy is going to look very different in 10 years. So just starting and doing and cutting down on the Netflix and exchanging time. Outside I feel like the payoffs are really there. So Jamie, what do you see next for you? Did you when you sold this business? Did you have another idea in mind? Has that started coming to fruition? Or are you just really living in the moment and taking in the fact that you’ve built a successful business and been able to sell it at a price point that gives you some personal capital to do what you want what is next for you on the horizon?

Dr. Jamie Wilkey  34:43

So I’m gonna have the best summer of my life this summer with my kids and work very minimally and just really enjoy what I’ve built. I’ve always I’m such a high achiever and like always wanting to build the next thing and go, go go but I’m intentionally stepping back and like I just want to hang out with my kids and enjoy my garden and be outside all day, because I love being outside. I’m going to do that for this season. But then Corrie, this fall, my youngest goes to first grade. So for the first time in 13 years, all of my children will be at school all day. And there’s not like this huge interruption with like, right now he’s in half day kindergarten. So like, my whole day is broken up, I’m gonna focus and I want to build something big and awesome that I can really like sink my teeth into and like, be in it for the long run for pharmacy. And I’m actually really interested in communities, I feel like communities are the next. Not the next big thing, but like the next really effective way people learn and grow and change. As someone who’s built online courses, I know online courses are awesome, but almost no one finishes them. And it’s very up to like the person who’s doing it their impetus to finish. And I’m so intrigued with communities and bringing people together in like a private place that helps them grow and support each other because we’re all humans, and we just need connections with each other. And I don’t know, I’m, I’m figuring that out. But it’s gonna be something with a community and it’s gonna be awesome, Corrie.

Corrie Sanders 36:18

Yeah, I think that that it’s very natural to want human connection and human support. And I you are placed in a perfect position as someone who’s built a pharmacy community and a very niche area of what is that community look like and what worked well, and what didn’t work well, and being able to build off that I think will be a very successful starting point for you. So I’m excited to see where that goes. 

Dr. Jamie Wilkey  36:38

Well ,even if it’s not, it’s just going to be fun. Like, that’s how we figure it out. Like, and I almost want an element like, I need to doubt it’s going to work to do it anyway. Because if we you can’t wait until something feels like okay, this is absolutely a slam dunk, I think you have to have an element of like, is this more than I can chew? Is this a little too ambitious to be the right size of project for me or for you for anyone that like, if it feels so easy, then it’s, it’s, it’s probably not right for you like a little bit of growth and stretching and like that scariness of like, Oh, could I really do this is, is good for us and part of the thrill of pushing ourself.

 

Corrie Sanders 37:23

Jamie, do you think that that’s a characteristic that you always had? Or do you think that wanting to lean into growth and personal development was something that you realized is a priority once you took the transition into being an entrepreneur, because I’m thinking of the average pharmacist who is going to hear that and be like, I do not want that. I want something that’s a slam dunk, I want something that I know is going to be something that I can count on every month. I feel like pharmacists are just very risk averse in general. So do you feel like that’s always been in your nature? Or do you think that now you’ve had a taste of it? That’s what you want to do. And that’s part of your higher purpose and bigger purpose?

Dr. Jamie Wilkey  37:58

Well, I’m an oldest daughter, so I feel like it’s like baked into who I am. But also like seeing, really seeing what it’s like to earn money yourself, and how much you can earn and how consistent it can be that like, I just can’t go back to a job that’s out of my control. Again, like because I love not having risk. And I don’t feel like what I do is risky, it just takes time. So unless Netflix for me, it feels like the ultimate long term strategy that almost no one else is going to do because it takes work and a job is more comfortable. So like I I strongly believe I am like the least risky person. But I have a long timeline and willing to experiment because I know that like this is what it takes to succeed is like trying and being in public and doing in public. And most pharmacists don’t dare do that. It’s like the scariest thing to say, like, tell the world what you’re building. And I’m working with a couple of one on one clients right now. And that’s where some of them are at the point like okay, you’ve built your business, and I need you to create a social media post, just like on Facebook or Instagram, wherever you are, and just tell people what you’ve built. So they can celebrate with you. You’re not asking for like clients yet. You’re just saying like, Hey, I started a business like go female power. They won’t do it, Corrie! They’re like, oh my gosh, no, no, I’d rather just teach about diabetes than say I have a business because that feels salesy and like, I don’t want people to see me like, well, you have to be able to present yourself online to help people and it’s not salesy.

Corrie Sanders  38:21

Yes. And it’s in the world of digital digital business this is par for the course at this point.

Dr. Jamie Wilkey  39:45

Yeah. It’s par for the course!

Corrie Sanders 39:48

And I had a friend actually summarize something for me at one point, which is why I started looking into the transition of being an entrepreneur and working for myself as well. He does very well in something that’s not healthcare related, but He’s rewarded for how hard he works. And he told me as a high performer and a high achiever, I will never be in a salaried position because it would take away a lot of my drive. And I feel like when I heard that it was a lightbulb in my head of, I’m working so hard, and I’m not going to go anywhere, and a percentage increase of my income in a substantial amount of time. And so for me, that was such a lightbulb moment. And I think that’s kind of summarized by what you said is that I now that I make money for myself, and I know what that tastes like. That’s how I want to keep my income for years to come. So I also one of my last questions, Jamie is what other streams of income have you leaned into at this point in time? So I know that you have teaching experience, it sounds like you still have some coaching going on? Are you keeping your hands busy with anything else, aside from the pharmacogenomics business and Wealthy White Coat? 

Dr. Jamie Wilkey  40:47

So I have a couple streams of income that are pretty fun that I’ve built, kind of for myself, that is awesome that we hear about recurring revenue. And I’m like, Oh, I did that a few years ago. So now I get to enjoy it. So a couple of ways I earn money. Alright, I do have some one on one people that I work with that, like, have found me through through LinkedIn, and like we’ve just jivved, so I’m helping them one-on-one. It’s way less intensive than like, a full program, but it’s really fun and energizing for me. And for them. I also teach for the University of Florida, they have me help, help review, update their curriculum and proctor some of their courses within the precision medicine program in their school of pharmacy, which is awesome, it’s so fun. And my old boss, who he used to work at Walgreens. Now he works at the Student Health Center at the local college here, he asked if I would come Thursday afternoons from like two to 6pm to help fill in while he goes to choir practice. And I was like, You know what, I actually let my license lapse. So let’s see what it’s like to be a pharmacist and like, get a steady paycheck again. So I’ve actually started doing that again, just like for the fun of it. And it’s been really cool Corrie to have like W2 income and my own income all mixed together. That because there really is something to say about a job and like that you can clock in and clock out and earn a good salary. pharmacists have a good salary. And for me, I kind of ebb and flow with employment that I like like it, but then I can earn so much more myself. But then just that ease of like clocking in and out. So it’s been kind of fun to go back and forth. Because first I swore off pharmacy like I’ve done and now like, you know what, this is actually pretty fun in this environment with like these cute college students who just need birth control, Adderall, and antibiotics like, I could do this. So those are the main streams I have. I also do some advising and speaking but that’s anyway.

Corrie Sanders  42:44

But the underlying thing is that one, you can continue to pivot as a pharmacy entrepreneur. So you let your license lapse, who cares, you can go back and get it. And it’s not a huge deal. If you want to go back to something that you’ve known in the past with the W2 job, but to when you describe all these things, you’re saying it’s so fun, every single job you’ve taken on is so fun. And I think that it gets lost in this traditional education wheel where we go from undergrad to pharmacy school, to residency to certificates to additional training all these things you just continue on in this wheel. And it’s so much of it is performance based that you lose touch with why we really went into pharmacy, at least that’s how I feel is I got to a certain point where I just looked back and I was like, wow, I’ve done everything right. But it still feels wrong. And that is scary to me. And so I love that you’re at a point now where every job you’re describing, say it’s energizing for me, it’s fun, and that’s what ultimately keeps you happy and working overtime is that it’s this cliche sentiment where if you’re having fun, you never work a day in your life, totally get it. But that’s the freedom that you’ve given yourself is that work should be fun, it should be an energizing part of your life, not something that drains you for 40 hours a week. So I love hearing that you’re at that at that point. And I’ve got one more question and then I’ll ask where people can find you if they want to get in touch with you. But my last question is, what would you say to an aspiring pharmacy entrepreneur? So we shared those two lessons earlier of, you know, just starting and keeping moving. But if you’re sitting at the point of contemplating an idea within pharmacy practice and looking at something that’s in a non traditional setting, anything specific that you would share with that pharmacist?

Dr. Jamie Wilkey  44:25

I would say just get vocal and get online because you will stand out especially if you’re doing anything within any realm of health care, health care people are silent stalkers and scrollers. So if you have a voice and are consistent, you will stand out and you people will attract opportunities to you. And so the table start flipping instead of you like reaching out like Will anyone work with me? Will anyone want me? If you consistently stick to a topic and teach on it and just own it, people start coming out of the woodwork for you. And it’s just the best feeling that you don’t have to muscle your way into your own business, you find that like, just talk about something, help someone. And more opportunities come to you that like, oh, wow, I can work for this person or this person wants to hire me or like, it all comes together if you’re willing to like stand up and stand out, because few people are willing to do it. And so really like, that’s what magnetizes people to you, and get you out of this weird rat race of like applying to hundreds of jobs and getting more letters after your name, to feel like you’re the best candidate, don’t play that game. It’s an antiquated game, and you’re gonna get a position that you don’t want. And so even within entrepreneurship, like being willing to stand out, because you gotta stand out to be an entrepreneurship, and so just practice talking online every day, it might scare you to death, but really like that life skill, if you can get the hang of it. Like the right people will find you the world is your oyster. And just think of it as a skill and not as a personality trait that you either can or can’t do, because everything is learnable.

Corrie Sanders  46:01

I love that. Well, Jamie, this has been so great. I feel like we’ve covered a lot of ground. And you’ve done so much in the past decade that I think we broke it down into chunks that will be easily absorbed by our listeners. And this is coated with lots of different lessons. So thank you for being so vulnerable and transparent. You’ve been so gracious with your time and you do that online so well. Where can people find you if they want to learn more about what you’re doing? And about what you’ve done in the past or reach out to you independently? What’s the easiest way for our listeners to get in contact with you?

Dr. Jamie Wilkey  46:29

Oh, just on LinkedIn. That’s like, what social media I use. I love LinkedIn. You should be on LinkedIn. If you’re not, create an account. It’s the best thing you can do for your career. Find me there Jamie Wilkey LinkedIn, send me a DM I’ll talk to you. It’ll be fun. 

Corrie Sanders  46:45

That sounds great. Thank you again, Jamie Wilkie for being here. Congratulations on all your recent success. And we’re excited to see where you go in the next couple of years and even long term seeing where you end up.

Dr. Jamie Wilkey  46:57

 You too, Corrie! Thanks!

Tim Ulbrich  47:00

[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 pharmacists unless otherwise noted, and constitute judgments as of the dates publish 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 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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