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YFP 375: Breaking New Ground: Emmanuel Ayanjoke’s Vision for Altev Community Pharmacy

Posted on September 5, 2024September 2, 2024 by YFP Media

Tim Ulbrich interviews Emmanuel Ayanjoke, PharmD, on his journey to opening an independent pharmacy in Avondale, tackling challenges with vision, risk-taking, and community care.

This episode is brought to you by First Horizon.

Episode Summary

In this inspiring episode, Tim Ulbrich interviews Emmanuel Ayanjoke, R.Ph, PharmD, MBA, a third-generation pharmacist with a passion for community care. Emmanuel shares his remarkable journey to opening an independent pharmacy in Avondale, Cincinnati. Driven by a desire to make a difference, he pursued a pain management and palliative care fellowship, gaining invaluable entrepreneurial experience along the way. Through the support of Project Oasis, a McKesson initiative aimed at addressing pharmacy deserts, Emmanuel was able to turn his vision into reality.

Despite facing significant financial challenges, including high student loan debt, Emmanuel underscores the importance of calculated risk-taking and the power of strong relationships. Emmanuel offers insights into the future of independent pharmacy and how he has strategically aligned his personal and business financial plans to achieve his goals. This episode is a must-listen for anyone interested in the evolving landscape of independent pharmacy and the bold steps required to succeed.

About Today’s Guest

Dr. Emmanuel (Manny) Ayanjoke, R.Ph, PharmD, MBA is the proud owner of Altev Community Pharmacy in Cincinnati, Ohio. A graduate of University of Toledo College of Pharmacy, Dr. Manny has spent over 5 years serving various communities as a dedicated pharmacist. Before opening Altev, he worked at Ziks Family Pharmacy, honing his skills, and understanding the vital role of pharmacists in community health. His work as a clinical pharmacist at Ziks had notable success and he was featured as a keynote panelist at the American Pharmacist Association (APhA) 2022 conference. Alongside his clinical role at ZIKS Family Pharmacy, Dr Manny completed a fellowship in pain management and palliative care fellow at Cedarville University where he engaged in teaching, research, patient care, as well as creation of innovative ways to advance pharmacy practice.

Key Points from the Episode

Opening Remarks and Sponsor Introduction [0:00]
Emmanuel’s Career Path and Family Background [2:28]
Pursuing a Fellowship and Entrepreneurial Vision [4:58]
The Decision to Open a Pharmacy [10:45]
Challenges and Support in Opening a Pharmacy [19:51]
Intersection of Personal and Business Finances [27:30]

Episode Highlights

“I wanted to pursue something that allowed me to be an entrepreneur in some way; I knew it had to be something that would leverage my school as a pharmacist, and with my experience, I was like, well, in every other you know, area of pharmacy practice, they’re already really the people that are dominating. I want to sort of create my own niche.” – Dr. Emmanuel Ayanjoke [5:53]

“I wanted to sort of carve out a niche for myself in pain management, to be able to be an entrepreneur, be a consultant, pharmacist, and do all these things until the point that I was able to actually stop my pharmacy so it was still in line with my overall vision of being an entrepreneur and being able to self, direct, direct my destiny, and not, you know, be beholden to a paycheck.” – Dr. Emmanuel Ayanjoke [6:24]

“I think your biggest asset to success, for anyone, any successful person, is people.” – Dr. Emmanuel Ayanjoke [20:43]

“I’m not saying this because I’m anywhere yet, but I’m saying this because I’ve seen other people, and I learned from a lot of people, but what I found is people that tend to be successful often go against the grain, go against what the crowd typically does.” – Dr. Emmanuel Ayanjoke [23:17]

“My vision and the way I see things and my general approach to life and business is sort of like planting trees, right? And what I mean by that is, yes, you might not have the perfect nutrients for a tree that’s several feet high, but you can at least plant something for now. And that that is kind of has been my approach to everything. You might not feel like you have the financial capacity to do certain things, it’s still important to plant the tree. – Dr. Emmanuel Ayanjoke [28:37]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

Hey everybody. Tim Ulbrich here and thank you for listening to the YFP Podcast, where each week, we strive to inspire and encourage you on your path towards achieving financial freedom. This week, I sit down with Emmanuel Ayanjoke to discuss his decision to open an independent pharmacy as a new practitioner, his perspective on the future of independent pharmacy and the intersection of his personal and business financial plans. Let’s hear a note from today’s sponsor, First Horizon, and then we’ll jump into my interview with the Emmanuel.

Tim Ulbrich 00:29

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% down payment for a single family home or townhome for first time homebuyers, has no PMI and offers a 30 year fixed rate mortgage on home loans up to $766,550 in most areas. The 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 Molly from New Berlin, Wisconsin, had to say about her experience with First Horizon: “The communication and always being available to talk over the phone was great for us. It also made an impact getting an initial overview and education on the process from Gail. Being able to submit everything electronically made it more efficient.” So if you want to check out the requirements for pharmacists Home Loan from First Horizon and to start the pre-approval process, visit yourfinancialpharmacist./home-loan.harmacist.com/home-loan.

Tim Ulbrich 01:58

Emmanuel, welcome to the show.

Emmanuel Ayanjoke 02:00

Thank you, Tim. I’m delighted to be here today.

Tim Ulbrich 02:03

Me as well, and I’m looking forward to the opportunity to talk to you about your experiences opening up in independent pharmacy. We crossed paths through the Ohio pharmacy circles over the past few years, and once you announced the grand opening of your store, Altev Community Pharmacy and the Avondale, Cincinnati area, I reached out to invite you on the show so we can learn more about your entrepreneurial journey. And before we get into that, let’s talk about your career path into pharmacy, Emmanuel, what led you into the profession and to the University of Toledo, where you completed your PharmD in 2020

Emmanuel Ayanjoke 02:38

Absolutely. So I, you know, I’m Nigerian. Grew up in Nigeria. That was born in Nigeria, till I was I grew up left Niger when I was about 15 years old, and I was fortunate enough to grow up in the family of that pharmacy is a thing. So my dad was a pharmacist and a pharmacy owner, and his dad was a pharmacy, pharmacy owner. Now, back then, they refer to them as chemists, because this was way back then in the days, but they were, you know, I come from a long line of pharmacists, and I would never forget when I was about seven years old, because I think that’s the age where everyone kind of starts to pick up on things. And, you know, observe our parents doing different things, and I remember so vividly, so many moments where patients will just come in. And, you know, one of the things I always like to say is pharmacists. Pharmacy in Niger is very different than here. Pharmacy is much more front line of healthcare. You went to the pharmacy first before going to the doctor, they actually the pharmacist referred you to the doctor in things that were too complex to be handled in outpatient. So I grew up in that setting, seeing my dad as a pharmacist, business owner, taking care of his family, but also taking care of the community. And people just come into the pharmacy asking questions, having their needs, health needs met. You know, it was a different way to impact people’s lives, and that resonated with me very deeply. I, you know, grew up in that environment that I knew I wanted to direct my own destiny and own a business. And what dawned on me over the years is what’s more important in owning businesses, doing something that impacts lives. So put it short, I’ve always been in pharmacy. I grew up in a pharmacy, and I didn’t see myself doing anything else, because that was what was just in front of me.

Tim Ulbrich 04:33

So third generation chemist, then, right?

Emmanuel Ayanjoke 04:36

Yes.

Tim Ulbrich 04:38

So after you finished your PharmD at the University of Toledo, you went on to pursue a pain management and palliative care fellowship. And some might be looking at that and saying, All right, so you grew up in a pharmacy environment, independent ownership, owning your own business. And this seems like a different type of an opportunity. So tell us more about the pursuit of that fellowship, and what were some of the experiences and things that you took away from that?

Emmanuel Ayanjoke 05:04

Yeah, so the reason why I went to pursue a fellowship was at the time when I was in Toledo, I was an intern, and I because I knew I wanted to own a pharmacy at some point, I decided to only work in an independent pharmacy, and that so me served me really great, because I started to experience first clients, what it took to run a business, run a pharmacy business in the United States. And I was fortunate enough to have a great pharmacy owner who showed me so many things. But you know, unfortunately, what that did to me was kind of give me a very bad perspective of how pharmacy should what pharmacy is. And I thought that, well, pharmacy is what I want to end up doing, but I don’t think it’s the time. I don’t think it’s the right time. But knowing that I wanted to pursue something that allowed me to be an entrepreneur in some way, I knew it had to be something that would leverage my school as a pharmacist, and, you know, with my experience, I was like, well, in every other you know, area of pharmacy practice, they’re already really the people that are, you know, dominating. I want to sort of create my own niche. I don’t like to follow the general trends and what people do, you know, go to AMK and those things, and those things are great, and I do a lot of that, and I did a lot of that in my career so far, but I wanted to sort of carve out a niche for myself in pain management, to be able to be an entrepreneur, be a consultant, pharmacist, and do all these things until the point that I was able to actually stop my pharmacy so it was still In line with my overall vision of being an entrepreneur and being able to self, direct, direct my destiny, and not, you know, be beholden to a paycheck. I just that idea just just doesn’t sit well with me, so that, that was why I pursued the fellowship, and was a great, great experience for me.

Tim Ulbrich 06:58

So what I hear there, Emmanuel, is there was this throughline of entrepreneurship that’s always been there, not surprising, right? Multiple generations in the family. And so you had this thought pretty early on, of, hey, I would like to own my own business, own pharmacy. Had some real life experience in independent pharmacy working for someone else, which I always recommend people that are thinking about, Hey, open up a business, get that experience, kind of see it firsthand, see what you like, what you don’t like. But through that experience, it sounds like you you butted up against the real challenges that we’ll talk about, you know, in the profession, and maybe that tampered down some of that interest, at least temporarily. And so you pursued this other pathway all the while, this through line of entrepreneurship, was there of, hey, I’m not sure exactly what it’s going to look like or when it’s going to happen, but I want to continue to pursue opportunities that are going to put me in a position in the future when I’m ready. Is that right?

Emmanuel Ayanjoke 07:49

Yep, that’s perfectly that’s that’s accurate. That’s exactly what happened.

Tim Ulbrich 07:53

One thing you said I’d love to hear more from you on is, you know, I knew that I didn’t want to be beholden to a paycheck. I sensed some emotion in that statement of just, you know, I know myself, right? I know that that’s not for me. Tell us more about you know that realization and why that was important to you?

Emmanuel Ayanjoke 08:12

Yeah, I think that realization has always been there in the one thing I didn’t also say was, my mom was also an entrepreneur. She had her home business, and she, you know, used to run convenience stores and couple gas stations back at home then. So I knew for a fact that, you know, that that’s just what I wanted to do. But, but one of the things that I’ve also learned about the system of America is the reality that, unfortunately, those who you know pay for everything is the middle class. And when I say middle class is those you know who are professionals, and you know, you’re hit with so much taxes and so many there’s so many downsides to being a W2 earner. So I realized that real, that part, but also the quite honest reality is that you’re never paid what you’re worth as a W2 earner. That’s just a reality down. There’s no two ways around it. If you were paid your worth, no one would create companies, right?

Tim Ulbrich 09:15

It wouldn’t make any sense.

Emmanuel Ayanjoke 09:17

Yeah, it wouldn’t make any sense, right? So I just didn’t like that idea. I felt like there was a lot more I need to do in this world than to have my, you know, my impact kept by being by working at a place. But that’s just what drives me, you know, again, it’s okay for most people, and that’s, that’s fine. There’s nothing wrong about it. I just didn’t, I don’t think that aligns with me, internally and throughout my life experiences.

Tim Ulbrich 09:43

Yeah, it’s interesting. And we’ll talk about the challenges of owning your own business. You know it’s real. I know it’s real. There are highs, there are lows, but it certainly does take off the ceiling. It also takes off the floor, right in terms of, you know what could go wrong, but you know what you’re sharing is very real. There’s no knock whatsoever to the path of a W2 you know, for many people, that is what makes the most sense, for a variety of reasons, but it is a reality that in the US, from a tax standpoint, the tax code is very much written in favor of people that own a business and own real estate. Those are really two things. And you know, it’s interesting we think about a lot of independent pharmacy owners, despite the challenges. You know, they’re really tapping into both of those things, and I can really sense how it was important you have that autonomy to be able to pursue not only the decision making in the business, but also to have some of the financial upside flexibility. But I want people to hear this loud and clear, like there is real downside as well when it comes to owning the business. And both must be considered, and we’ll talk about that here in a little bit. So take us back then you open the doors of the pharmacy in the Avondale, Cincinnati area in April of this year. And so at some point, you know, while you might have temporarily went away from Hey, I’m ready to open my pharmacy, it came back, right. So what was the moment where you said, All right, I’m ready to do this. And what led, what was the spark to really get into that place of alright, let’s go.

Emmanuel Ayanjoke 11:11

Yeah. So this was in 2022 which feels like last year, but two years ago, when I was in the middle of my fellowship, and I, you know, one of the things I value is network and having people around you that always look out for you. That is the value of that has just been immense in my life. But, you know, I was in my fellowship at the time, I was working part time, sort of, I mean, I wasn’t the official pharmacy manager, but I was basically the manager at the independent pharmacy that I worked at. So I was quite busy, you know, being the fellowship, doing research, and doing all these different things, and still fully commit, you know, helping out at the retail pharmacy. And I remember it was Stu Beatty, actually, from OPA.

Tim Ulbrich 12:04

Oh, no way.

Emmanuel Ayanjoke 12:06

Yeah, yes, yeah. He sent me the flyer to Project Oasis, which is the program that I got the opportunity to open the pharmacy through. And I started to learn about it. And initially I brushed it down. I was like, Well, this is some national program. There’s no chance that I’ll even get anywhere close to this. And I sort of didn’t even, you know, want to, I knew that’s what I wanted to do, but I really didn’t think I would get anywhere. And then, you know, two weeks later or so, Antonio Ciaccio who have gone to me, you know, through different experiences, and we’ve connected very well, he’s forwarded that same flyer to me, saying, Hey, I think you’d be a good candidate. I think you should apply to this. I was like, Oh, my so I guess the stars are aligned, and everyone thinks that I’m, you know, I tend to think of myself more humbly, and I didn’t think I would get anywhere. But you know, was these two folks that believed in me and encouraged me to go out and apply, and I took on the process and started doing my due diligence, drawing from my knowledge, and really leaning in on people that I know. Again, once I started to digest and understand what Project Oasis was trying to accomplish, it was almost mirror of what I wanted to do in every way right, make an impact in a place that doesn’t have a pharmacy, be the pharmacy, be the pharmacy shepherd, quote, unquote, in that community and helping address the needs and concerns of the community. So that just resonated with me on a very personal level, and it just aligned. And the biggest part of all that was that you got to open a pharmacy, but not just by yourself. You had the back end support of so many people that are committed to seeing this successful. So to me, was like, a no brainer, to at least pursue it. If it didn’t pan out, at least I learned a thing or two about writing a business plan that needed to be presented in like, you know, really, really hire people in McKesson, and so I applied for it, and that’s basically all where the story started.

Tim Ulbrich 14:22

You know, it’s interesting. Back to the through line of entrepreneurship. Emmanuel, I often say that, you know, for people and your story is such a good one, the synchronicity here is not accidental, right? So you might have kind of taken a sidestep or a pause, but it chased you down eventually, right? It chased you down in the form of Stu Beatty, now the Dean at Ohio Northern and Antonio Ciaccio, two incredible individuals in the profession and Ohio pharmacy practice that clearly saw a potential and an opportunity, and really, you know, that was a big nudge and an avenue forward. You mentioned Project Oasis a couple times. Tell us more about that for those that are listening, what exactly is that? How is that helpful to you getting this off the ground?

Emmanuel Ayanjoke 15:03

Yeah, so Project Oasis, was, you know, being that, you know, of course, I’ve been involved in no ins and out. But if you know, McKesson always tries, tries to tell everyone to just, you know, say certain lines. But I’ll give more, more back into how we started. You know, in Avondale here we had one of McKesson employees who lives and doesn’t live in Avondake, but family’s from Avondale here and has a very personal ties with community. This is way back then in 2018-2019 and he started to notice that his community was losing access to so many things. Grocery stores were closing, pharmacies were closing, and a community that’s in the heart of Cincinnati, literally, you see, health is right behind us, doesn’t have these critical things, grocery store, a pharmacy and so many other things that were needed. And there was this general talk within McKesson of trying to do a community impact project, something that would impact lives. And I think every organization of business should always try to do something beyond just their typical mission of whatever it is that they do to impact lives, because that’s where that’s all that matters at the end of the day. So they, you know, he took on the idea with support of folks within his division McKesson, that was a Russo O’Neill, okay? And he pushed his idea that, hey, let’s try to start a pharmacy where it’s needed. And they did an analysis and found that Avondale, Cincinnati, truly was, like, top of the list in terms of, you know, an urban region that doesn’t have a pharmacy, health isn’t where it needs, where it needs to be as a community level, and so many other things, disparities that were going on in Avondale, and that’s where it all started from. And, you know, fortunately, those within the higher ups of McKesson saw the impact that this project could make. And, you know, they dubbed the Project Oasis with the term that, you know, desert, pharmacy desert, and you’re putting the pharmacy there. And so, yeah, that’s what, that’s where Project Oasis started from, but one of the things that I learned through applying to it was the level of commitment that people had, not just as you know workers within this, you know, Fortune 10 company, but also the personal connection that people had towards a Project where people you know, you meet folks, are like, hey, whatever you need to be successful. I am happy to help you out. This is important. We want to make an impact in your community. So that was really, that’s really what Project Oasis is about. Now I don’t know what their what McKesson and their goal is right now with Project Oasis. But the goal was to sort of address this pharmacy deserts that come across, you know, the United States.

Tim Ulbrich 18:07

So we’ll link to that in the show notes for folks that want to learn more about that program. Do you have an idea? Manu, I’m just curious now, how many pharmacies have been supported by Project Oasis?

Emmanuel Ayanjoke 18:19

Oh, so right now, I am the first.

Tim Ulbrich 18:21

Let’s go!

Emmanuel Ayanjoke 18:22

Yeah, I’m the only one so far. And you know, it’s quite, quite a responsibility to be success, to make this successful, because a lot of other communities are, hopefully, maybe might be impacted by this. So failure is not an option. That’s how I see it. So I’m sort of a test run to see, yeah, if this can work.

Tim Ulbrich 18:45

Well, you and I both know, from a business standpoint, there will be micro failures that happen along the way. I hear you in the global failure, right? But, but naturally, for you to see this vision through, you’re going to have to embrace some level of failure along the way and take some risks. One of the things that stands out to me, Emmanuel, is that, you know, I talk with a lot of people on a regular basis, they have an idea, but it often dies at that point, right? The idea doesn’t go forward. It’s a whole nother level to actually execute, take on risk and begin to see that vision through and and I’ve since in your journey, while you’ve always thought about owning your own business, clearly the support and the resources through Project Oasis have been huge for you to say, All right, I’m ready to jump. I’m ready to move this forward. In addition to project Oasis and the team from McKesson that support you, what other resources have been critical to you as you’ve gone through this, this journey of open your own pharmacy?

Emmanuel Ayanjoke 19:41

I mean, if I started to list them out, you provide spend the next hour of this going through it. But I think the most important resource for me, in addition to the things that I try to do personally, like reading a lot of books, listening to a lot of audiobooks, has been people, the people that have gotten to meet. For me, I value relationships at a very high attribute, a very high value to relationships. So people that played a key part in my life, as been my former boss that I worked with in Zik’s Pharmacy. He’s just been a terrific human being to me, and has helped me with the realities of owning the business and how to be successful. So it’s people. I mean, I could go down a list of folks at Cedarville who have helped me personally my personal growth as a pharmacist, helping me understand certain things. It really is just people. I think the big, your biggest asset to success, for anyone, any successful person, is people.

Tim Ulbrich 20:49

Yes, relationships, people, absolutely. Especially in our profession, you know, where that community is is so small, right? Relatively speaking. And one of the things I asked you, before we hit record, I said, Hey, Emmanuel, how you doing? And you said, Hey, I’m going 1000 miles an hour, but I have so much support, so much support, and I think that speaks to the work that you’ve done in fostering those relationships, and the growth that has come from those. Emmanuel, I have to ask the obvious question that I think a lot of probably new practitioners that are thinking about owning their own pharmacy, or anyone, for that matter, that maybe is thinking about owning on a pharmacy, which is Wow, opening a pharmacy in this climate, right? We know the challenges are real. According to a recent NCPA survey, over 30% of respondents reported that they’re considering closing their doors in 2024 because of the financial challenges, and over 90% of them said that they may drop out of Medicare Part D in 2025 if the challenges still persist. So from the outside looking in, it doesn’t appear to be the best time to be launching a new pharmacy. So tell us more about how you’ve been able to, you know, see through that despite those challenges being real, and say, Hey, I’m still going to go at this.

Emmanuel Ayanjoke 22:02

I think the first thing I’ve learned in life is nothing is truly as good as it seems, and nothing is truly as bad as it seems. It’s always all gray. There’s no exactly this is black and this is white. It never is that way. It’s always all gray. And what I mean by that is, will you dive deeper and understand in a specific market the factors and headwinds going on in that market is very different. For example, in Ohio, if you’re in a Medicaid an area that has high Medicaid concentration, you have a fair dispensing fee that covers your costs of operating as a business. So that alone is a huge difference than a pharmacy that doesn’t have a high Medicaid area, right? So, yes, there’s always there. They are real, harsh realities of the pharmacy right now, even as a new business, when I look at my Medicare, you know, scripts, and performance in those scripts, I mean, I want to, I would throw my hands up and just, it’s, it’s horrifying sometimes, you know, but the reality of what I’ve learned is, you know, typically, to be successful in life. And I’m not saying this because I’m anywhere yet, but I’m saying this because I’ve seen other people, and I learned from a lot of people, but what I found is people that tend to be successful often go against the grain, go against what the crowd typically does. And there’s cycles in life. There’s always going to be naders and high points. And I think pharmacy is out of Nader right now. But when you are the Nader, that’s not necessarily negative thing. That’s a good thing when you started a native because it’s only high from there. And there’s a lot of factors and a lot of things and challenges that are going to happen in next 10 years for pharmacy to be where it needs to be. But I think that I am hopeful that we’re at the lowest point, and from here it’s just moving forward.

Tim Ulbrich 23:59

Yeah, I really hear mindset there Emmanuel, which I think is huge as a business owner, but I also hear optimism. I’m an optimist by nature, you know, as well. But I agree with you, actually, you know, it reminds me of Seth Godin talks about this in his book, The Dip, where, you know, often we go through these cycles, could be a project, could be a business, wherever you know, where we have an initial momentum and surge, and then we, you know, for whatever reason here we’re talking about market conditions and factors and reimbursement. You know, we kind of go down right, and we get to this low point, and we start to just come out of the other side of it, but we can’t yet see what’s coming. And that’s the point where a lot of people give up, you know, is when they’re in that low point, in that dip. And I think that it feels, and again, I’m a half glass full person, it feels like all signs are pointing towards some reform and these things, I think you and I look at this just as a common sense business owner, and we’re like, How in the world can this be okay to operate a business with these practices going on right? Now there’s a lot of headwinds that we’re facing in terms of why that’s the case, but I’m curious to hear from you as you look at as an owner and someone who shoulders some of the responsibility to advocate for, you know, the viability of community independent pharmacists to be able to provide the value that we know. The literature is very clear, the positive value and outcomes that a pharmacist can provide in their community, especially in an area where there’s a lack of access to healthcare. The data is clear. It’s there, but we continue to be undervalued and under reimbursed globally speaking. So as you look at this from, hey, I’m a business owner, but I’m also an advocate for the profession, what are some of those key issues that we really have to address?

Emmanuel Ayanjoke 25:35

Oh, where do I start? I think the biggest key issue is, you know, we live in a capitalistic society, and we just have to accept that reality. Our businesses are not, you know, they’re not you know, pharmacies are not nonprofits. They have to be able to make money doing a certain service. And there are two ways to incentivize people to do things. You either use the carrot or use the steak method, right? And to really move the needle on a lot of things in pharmacy practice, to get community pharmacy practice to be where it needs to be, there has to be payment reform. Reform in a sense that it covers us to operate as a business and provide those scripts, but also reform in a sense that we’re actually paid for the clinical knowledge that we provide. So those are, I mean, that sums, encapsulates lots of challenges, but those are the key. I think those are two things that need to happen for pharmacy, community pharmacy, to be where it needs to be. I think the values there. I mean, everyone is the values there. I’ve been opportunity to be on the tables with payers, physicians. I mean, everyone, even patients, everyone agrees that the values there. The challenge now is just getting rid of those barriers that allow us to be able to create a clear path to making these realistic, or, I guess, tactile, changes in the payment models that allow pharmacists to be paid.

Tim Ulbrich 27:08

Yeah, amen, you know, I think we it’s very clear. We don’t need another study to demonstrate the value of what a pharmacist can bring, right? We don’t need another pilot project, you know, to demonstrate that. They’ve been done. We see the value and the reimbursement, I think, is really the issue. And two individuals you mentioned earlier that were pivotal, you know, you started the pharmacy, Antonio Ciaccio, Stu Beatty, have been key advocates of this in the state of Ohio, you know, over the last decade, if not more. So last question I want to ask you is really the intersection between the business and the personal side of finances. You know, I talk with a lot of new graduates, and it’s not uncommon for me to hear something along the lines of, Hey, Tim, I would love to do X, Y or Z. And that could be on a business that could be, you know, do something different, work part time. It could be a variety of different things. But what comes next is my $200,000 of student loans, or insert any other financial challenge that is so common among new practitioners is a barrier to being able to go work towards these other goals that they have, right? And I think the golden handcuffs can be very real when you’re looking at a couple $100,000 of debt, and you can sign up and work for 120 130 $140,000 it’s hard to say no for that, and it doesn’t incentivize a whole lot of people to take risk in the way that you have done. So tell us about your decision, your journey to reconciling your own financial plan as a new practitioner, and ultimately making that decision to take on some risk as a business owner.

Emmanuel Ayanjoke 28:35

Yeah, absolutely. My vision and the way I see things and my general approach to life and business is sort of like planting trees, right? And what I mean by that is, yes, you might not have the perfectly, you know, I guess nutrient swallow for a tree that’s several feet high, but you can at least plant something for now, and that that is kind of has been my approach to everything, and why you might not have the financial capacity to necessarily, you know, you might not feel like you have the financial capacity to do certain things, it’s still important to plant the tree. And that’s, that’s how I see things. So I have about, honestly, have just slightly I’m a little bit better, and in comparison to a lot of pharmacy graduates, I have about $103,000 in student loans, which, which is still a lot of money, quite a lot of money. But it’s not nothing compares, in comparison to others who are just graduating. But the thing I would say is the way I would approach this is, do I have the cash flow to sustain my ability to eradicate those loans in a reasonable way? And if I do, or if I don’t, what ways can I mitigate that, even if I went to going to you know, own a business, that would be how our approach is. Because no matter how you see it, right, if owning a business is your end goal, if that’s where you want to be, time is going to go on. You know, time doesn’t wait for anyone. 10 years down the line, you’re going to be in the same place having, I mean, if you’re lucky, cleared all this debt, but at the end of the day, if this is something you want to do, you have to figure out to make your finances accommodate that in a way that makes sense. Now, again, it doesn’t mean you’re just blindly taking risks, right? Yeah, you actually have to calculate and see, okay, yeah. What is the worst case scenario if this happens, you know XYZ, and be able to be okay with that. If you can’t be okay with it, then maybe, I mean, some people, just maybe, the reality is that they actually are aren’t fit from a mindset perspective, to own a business, and that’s okay because it requires that you’re okay with, like, literally, things burning down. You just being by yourself and being able to weather through storm, you have to be okay with that reality, and that shouldn’t, shouldn’t scare you or deter you from accomplishing what you actually want to do. Yeah,

Tim Ulbrich 31:12

What I really hear there is, is, there is risk. It’s real, but it’s calculated risk, right? You’re not blindly entering into something, but we’re also not being paralyzed, you know? We could wait forever for the stars to align, you know. And I think that’s something I had to reconcile on my own entrepreneur journey. Is sure, could there be a tomorrow where it’s a better time, maybe, but there’s also a lot of things I don’t know that are going to happen tomorrow. And the question I always ask myself, not only in starting a business, but also in making decisions within the business, is, how high is the ceiling and how low is the floor. And I think my mindset, and probably for a lot of pharmacists, that I’ve kind of untrained myself, or I’m still untraining myself over time, is, you know, we tend to overestimate the worst case scenario, when, in fact, if we write it on paper, often it’s not as bad as we think it is, or built it up to be in our heads, and we maybe give we underestimate the potential of where this could go. Now, you got to be careful about that, right? If we have naive optimism, you know that that could burn us, but really assessing risk, you know, I think risk can bring a ton of emotions of fear, and we lose the objectivity of what are we actually talking about, right? What is the worst case scenario, and how can we begin to work through that? So I appreciate you sharing that as it relates to your own journey. Well, this has been fantastic. Dr. Manny, right as your patients call you, so grateful for you taking the time before you open the store today. A lot of inspiration that you provided to me in your own journey. I look forward to continuing to stay connected with you and to see where the journey goes going forward. Thank you so much for taking time to come on the show.

Emmanuel Ayanjoke 32:41

Thank you so much. Tim. Glad to be on.

Tim Ulbrich 32:45

Before we wrap up today’s show, I want to again thank this week’s sponsor of the Your Financial Pharmacist Podcast, First Horizon. We’re glad to have found a solution for pharmacists that are unable to save 20% for a down payment on a home. A lot of pharmacists and the YFP community have taken advantage of First Horizon’s pharmacist home loan, which requires a 3% down payment 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 33:30

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 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 analyzes expressed herein are solely those of your financial pharmacist, unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward looking statements which are not intended to be guarantees of future events, action results could differ materially from those anticipated in the forward looking statements. For more information, please visit your financial pharmacist.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 374: Pharmacy Innovators with Aaron Emmel, Founder of Pharmacy Tech Scholar

Posted on August 29, 2024August 27, 2024 by YFP Media

In this episode of the Pharmacy Innovators series hosted by Dr. Corrie Sanders, we meet Dr. Aaron Emmel, a pharmacist with a diverse career path.

This episode is brought to you by YFP+

Episode Summary

In this latest episode of the Pharmacy Innovators series hosted by Dr. Corrie Sanders, we meet Dr. Aaron Emmel, a pharmacist with a diverse career path.

Dr. Emmel shares how open doors and opportunities led him on a journey from a community pharmacist to executive health system leadership and the pharmaceutical industry to entrepreneurship. With many lessons learned along the way, Dr. Emmel reflects on trusting his intuition, leaning on mentors, working hard and staying curious. Throughout his journey, he explored other income streams, including real estate investing, consulting and eventually launching Pharmacy Tech Scholar, an online education program for pharmacy technicians.

Dr. Emmel’s career journey exemplifies the extraordinary versatility and potential of a PharmD.

About Today’s Guest

Aaron Emmel graduated with his Doctor of Pharmacy Degree from the University of Florida in 2007. After a short stint as a staff pharmacist at Walgreens, he was afforded an opportunity to work as a clinical pharmacist at his local community hospital. He developed a passion for critical care medicine and spent years as the dedicated ICU pharmacist. In 2015, he earned his Masters in Healthcare Administration from the University of North Florida. With a goal of moving into executive health system leadership, he transitioned into a role as the Director of the Clinically Integrated Network and ACO owned by the hospital and local physicians. He served in this role until 2018, when he made the decision to transition into the pharmaceutical industry where we worked in Medical Affairs roles until his decision to end employment in 2024.

Aaron launched his first business, SmarterMeds, in 2010. Focusing on MTM services, he learned many lessons on entrepreneurship and business before abandoning the effort in 2012. He first began consulting in 2014, and significantly increased this work following his departure from the hospital in 2018. In 2020, he launched Pharmacy Tech Scholar, an online education program for individuals interested in becoming certified pharmacy technicians. He also invests in real estate.

Aaron has been married to his high school sweetheart, Allison, since 2010. They have two amazing daughters, aged 8 and 11. In his spare time, Aaron loves traveling with the family, fishing, exercising, and fueling his coffee obsession.

Key Points from the Episode

Dr. Aaron Emmel’s Career Journey [0:00]
Dr. Emmel’s Early Career and Decision to Leave Retail Pharmacy [3:38]
Transition to Pharmaceutical Industry and Consulting [6:48]
Financial Decisions and Career Transitions [11:44]
Building and Diversifying Financial Portfolio [30:06]
Final Thoughts and Advice for Listeners [1:01:16]

Episode Highlights

“I’m just so grateful that I’ve had an interesting journey and I’ve been able to do so many different things. I’ve met so many amazing people along the way. So when I reflect on this, I’m just so grateful for everything that’s happened, and I’m excited for what’s to come, because I feel like I’m always trying something new and navigating things, maybe accidentally, just the right way.” – Dr. Aaron Emmel [1:58]

“I’m not out there to make, you know, a bazillion dollars and live on a mountain somewhere. I mean my mindset at this point has become one of, I want to be prepared for anything. I could be in a position to retire pretty soon, if I really wanted to, but that’s not what I want. I want to be able to weather any storm, and I want my family to be set no matter what. That’s what’s driving me. – Dr. Aaron Emmel [29:46]

“I do good work because I want to do good work. But there’s other ancillary benefits that come from that, just aside from just doing well in your employee role and growing that career ladder.” -Dr. Aaron Emmel [32:54]

“Being brave enough to make tough decisions that you know are in your best interest, always try to do things the best that you can. And the other important lesson that I’ve learned is to do them for the right reasons.” -Dr. Aaron Emmel [42:51]

“I didn’t have enough of an altruistic mindset at the time, but I’ve literally built my career ever since then on the concept of trying to do the right thing for people. So if you do all that and you do it well, opportunities come”. – Dr. Aaron Emmel [43:42]

“With all these inflection points in my journey, it has had just as much, if not more, to do with the other people around me than it’s had to do with me. And I definitely come to understand that better now.” -Dr. Aaron Emmel [1:01:45]

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 pharmacists navigating the entrepreneurial journey. In this series, we feature stories and strategies that help guide current and aspiring pharmacy entrepreneurs. Today, we have Dr. Aaron Emmel, whose unique career pathway and experience highlights the true flexibility of a PharmD. After graduating with his Doctor of Pharmacy degree from the University of Florida in 2007 and a short stint as a community pharmacist, he was afforded an opportunity to work as a clinical pharmacist at his local community hospital, where he specialized in critical care. After earning his master’s in healthcare administration from the University of North Florida, he transitioned to Executive Health System Leadership. He then made a large career shift by leaving clinical practice for the pharmacy industry, where he simultaneously started various businesses and consulting while expanding his investment portfolio. In 2020, he launched Pharmacy Tech Scholar, an online education program for individuals interested in becoming certified pharmacy technicians. Today, we speak to Dr. Emmel about the importance of mentorship and decision making and building unique and valuable skill sets in each chapter of his career. But what really stands out to me the most in my discussion with Dr Emmel is his passion for helping others by problem solving through the lens of a pharmacist. I’m sure you all will enjoy the true diversity of D.r Emmel’s path. So let’s jump right into our conversation.

Corrie Sanders 01:31

Well, Aaron, thanks for joining us on the podcast today. We’re excited to have you here!

Dr. Aaron Emmel 01:35

Yeah, thanks for having me. Corrie, I’m flattered. Hopefully my story adds something to the podcast.

Corrie Sanders 01:41

I’m sure it will. So before we dive in too deep, why don’t you give our listeners a little bit of background. So describe your path in pharmacy. Where’d you go to pharmacy school? What kind of training do you have? And just a general overview of your career to this point.

Dr. Aaron Emmel 01:58

Yeah. Okay, so where do I start? I will say up front, I’m just so grateful that I’ve had an interesting journey and I’ve been able to do so many different things. I’ve met so many amazing people along the way. So when I reflect on this, I’m just so grateful for everything that’s happened, and I’m excited for what’s to come, because I feel like I’ve always trying something new and navigating things, maybe accidentally, just the right way. But I went to the University of Florida, so I graduated with my Doctor of Pharmacy degree in 2007. I was, I think, the second class that did remote campuses at UF so I actually went to a campus in Jacksonville, Florida, met some awesome classmates that are still close friends of mine to this day. Here we are almost 20 years now after graduating, but all throughout pharmacy school, I worked at Walgreens as a technician/pharmacy intern. I’m sure we’ll talk about this in more detail. But with that, you know, I was kind of, I don’t want to say indoctrinated, because, you know, people have made great careers out of working at Walgreens, but I had bought into, you know, the long term career path with them, and took all the tuition assistance, and when I graduated, thought that that was going to be my career. And I’m ambitious young man. At the time, I kind of saw a path for myself, growing in the business sense, so I took the sign on bonus as soon as I graduated and worked for them as a staff pharmacist. But thankfully, after that, I had a couple of months later, a phone call from my local hospital where I did many of my clinical rotations, and they offered me a job to come there and work as a pharmacist, which at the time, I was starting to feel like I had made the wrong decision. Couldn’t have been better timing, and we can dive deeper into this, but to have that opportunity without doing a residency, I knew it was now or never. So I made that transition then, and had the wonderful opportunity to end up specializing in critical care, which to this day, is my clinical passion. I worked almost 10 years as the critical care pharmacist at Flagler Hospital in St Augustine, and I don’t know that we have time in this podcast where come with that, but that was by far my most professionally rewarding work. And I often fantasize one day about going back. I don’t know if that’ll be possible this many years later at this point, but just had an amazing career as a critical care pharmacist. Got to do a lot of really cool things at the institution and really drive some pretty substantial change in their ICU practice and even in the pharmacy practice in general, and I had some mentors that I looked up to in terms of what they had done in their careers and their health systems. But again, you know, kind of ambition driving me to think I’ve got a long career path ahead of me. What am I going to do with my life? I don’t see myself being a critical care pharmacist forever, and it’s a stressful job. And starts the way on you mentally, at least it did for me. So I went back and got my master’s in health administration, and kind of thought of having a goal that maybe one day I’ll be the CEO of a hospital. So that was the path I started to pursue almost 10 years in to having worked as the critical care pharmacist. So once I got that degree, I had always been pitching business ideas and thoughts to the hospital leadership, and I started asking for more and more responsibility. So they gave me a really cool opportunity to take a dual role as the Assistant Director of Pharmacy and then as the Director of Quality for their clinically integrated network, which essentially functioned as an accountable care organization, and I built their entire quality program, all the claims analytics that went along with that, all the infrastructure necessary to execute quality reporting for the entity. And it wasn’t long in that role where they really saw the opportunity for me to grow and take on all the administrative leadership for that organization. So I became the Director of the organization, handled everything from physician relations to finances and contracting, continued to oversee the quality program, and for that two year period, just had an incredible professional growth and sense of just learning about healthcare administration, working very closely with payers, and working very closely to oversee population health in the community and working with the physicians to do that. So that role was amazing in that sense, but it drove me into the ground. I mean, it was tons of work. You know, 60 plus hours a week, missing many evenings at home to be in physician committee meetings, lots of stress, because the organization, just as all community health systems in the past five years have experienced, for sure, just struggled financially. So I started to get the feeling that that wasn’t a long term path I wanted to pursue. And I had, you know, my mentor in that role, who was my boss, had gone on to be an executive member of the leadership team for the healthcare system. I saw what that was like for him. I didn’t want that for myself. So again, I kind of hit this inflection point where I saw the need to maybe pivot one more time. And I had just as many clinical pharmacists, you know, they get friends that go to the pharmaceutical industry and work in medical affairs and hear about how wonderful that job is. And I had so many people that left clinical practice that went and did that either came to see me in their role, you know, to kind of to do their opinion leader meeting, you know, requirements, or they’d call me and just tell me how amazing that job was. I never thought I’d work for the pharmaceutical industry, because at the time, I was always the clinical pharmacist that gave everybody from industry a hard time when they’d come in and try to detail people. And you know, to me, that was, quote, The Dark Side, just like that perception exists amongst many of us in the pharmacy world. But I, you know, thought, why don’t I give it a try? Let me see what it’s like. I was always afraid of the travel, but I did it. So in 2018 I moved into a role with Otsuka pharmaceuticals as they were building the Medical Affairs field team for new indication they were getting in rare diseases and kidney diseases. And again, it was just a great growth for me. I got to experience something new, meet a ton of different people, learn about the pharmaceutical industry. Got rid of a lot of the misconceptions I had about it, and really thrived in that role for six years. So I worked for that company for a while. I pivoted and took a director field role with another company shortly after, or five years later, and then at the same time, I had started some additional side ventures. We haven’t even gotten into my all my side businesses over the years, as I’m trying to keep all this story straight, but that it just became very difficult for me to handle everything else I had been doing on the side. So I stepped away from the director role. I took another just individual contributor role with another company as an MSL, but even that individual contributor role, I just couldn’t fulfill, you know, the duties of that role in my opinion, everybody thought I was doing a great job, but I didn’t feel that I was doing good service to the company or myself for my business ventures and other reasons too. I saw the need to leave employment, and I made that decision professionally earlier this year. And again, we’ll dive much deeper into all that, especially the finances and considerations that went into that, but that would be probably too long of a summary professional career as a pharmacist. Um, and at the moment, I would consider myself, you know, still a pharmacist, because I’ll always be a pharmacist. I do think I will be going back at some point to do something professionally as a pharmacist, and more than I’m doing right now with with my education business for pharmacy technicians and the consulting work that I’m doing. So yeah.

Corrie Sanders 10:26

That’s a great summary to at least kind of set the stage for where this conversation is going to flow, the many different aspects and transitions that you’ve made into the career. So just to summarize it for the listeners too, to paint a picture of where we’re going. But started in community pharmacy, transition to inpatient pharmacy, where you worked your way up through the leadership chain, and then making another career pivot into industry, which I can’t wait to talk about that, but then ultimately switching to consulting and really starting your own business. So diving full time into entrepreneurship, and I’m sure the wide variety of things that you had done prior to that were able to give you a really steady foundation as to what you wanted your business to look like, and different financial considerations and all that experience, I’m sure, came into play in a really positive way for you. So let’s break this down into the smaller chunks, so we can really dive into the details. I know you started in community pharmacy. You said you were a technician at Walgreens for a couple years through pharmacy school, and I know there was some financial incentive to stay on board as a community pharmacist once you had graduated. So can we dive into some of those benefits that that company had offered, and then ultimately you made a pretty quick shift into inpatient pharmacy, so talking about the benefits of community pharmacy, and then ultimately that really quick flip into to inpatient and kind of the decisions that went into that, if you could elaborate a little more.

Dr. Aaron Emmel 11:59

I’ll be happy to. You know, when I was going to school, I will say my financial mindset and my financial education was not very sound. I thought it was. It certainly wasn’t. There’s so many mistakes that I’m just so grateful I can share them with my children now. But you know, I was of the mindset that it was ridiculous to do a residency, because why would somebody in their financial life take one to two additional years where they’re not able to earn a substantial income after investing all the time and money into pharmacy school? A very, very short sighted mindset, by the way, if, if, if I didn’t know how my career was going to pan out and I had to do it all over again, I would certainly have done a residency, no doubt about it. I’m fortunate things worked out the way they did when I didn’t. But you know, I was kind of committing myself that I wanted to earn as much money as I could, as fast as possible. And at the time, the salaries that pharmacists were earning in community pharmacies, for the most part, were substantially higher than they were in hospital pharmacies, at least in terms of what those dollars look like for a student who wasn’t making much money at the time. So I’m thinking, why would I earn $20 to $30,000 annually less a year to work at a hospital, when I could just make that much more money in the community and not have to do a residency to be competitive. So that was the mindset that drove me to do that, and I was ignoring all the subliminal things I was feeling, especially as I started to go through my clinical rotations. And I loved all of the clinical rotations I did, and I don’t feel like I was a great pharmacy student. I probably was just going through the motions at the time as just kind of a young guy that just wanted to get out and make a great living. I have learned so much since then, and you know, I certainly have a much different mindset when it comes to learning now and what the pharmacy career is all about, and the role of the pharmacist. I was ignoring all that because I was so focused on the dollars. And at the same time, I was living a life that was not financially healthy at all, you know. So it was kind of a really terrible path I was leading myself down, and I wasn’t happy, you know, with the day to day work that I was doing at the community retail pharmacy level. And again, I was kind of trying to ignore that, because I was so focused on the finances. So, you know, after having gone through all the clinical rotations and knowing what experiences I enjoyed and what I didn’t, and then committing myself when I got done to work for Walgreens, and this is nothing again, I’m not throwing shade on Walgreens in this podcast, but it was just my personal experience and feelings. I just wasn’t happy, and I really started acknowledge that a little bit more when pharmacy school was over and I was working as a pharmacist, and I’m getting those first paychecks, and those paychecks weren’t really satisfying enough to warrant, you know, the experience I was having in the work. So I definitely had regrets, and I was so grateful when I got that call from the director of Pharmacy at Flagler. And I will tell you, this to me, was the most important inflection point in my professional career, by far, was the decision to leave retail pharmacy, to go to the hospital to do that. And you got to realize at the time, I did the stupid stuff that so many pharmacy students do. I had bought a house, bought a car, taken out all these loans before I even graduated, right? So, you know, I was in a negative net worth situation that took me a long time to dig out of, and then I’m faced with the decision that, okay, I’m going to take a at the time, I think it was about a $30,000 a year pay cut to leave retail, to go work for the hospital, and I had to write Walgreens at check for all the money I took, you know, because there was a fulfillment criteria for that tuition assistance and the sign on bonus. So I don’t even remember the dollar figure at the time, but it was $30 to $40,000 and at the time, that was a whole lot of money that I didn’t have. So, you know, I borrowed money to pay them back, and it felt like financial suicide at the time. And I will tell you from my personal experience since then, might have had a wonderful career that I never would have had had I not made that decision, and as I learned better financial management over the years, that singular decision has probably also put me in a financial situation now I never would have been in before in a positive way. I didn’t know it at the time, but all the opportunities that have come to me since then would have never come had I not gained the different experiences I did along this journey. And it all goes back to that decision.

Corrie Sanders 17:14

Yeah, I think that that’s a really great point. Is that as pharmacists and really calculating the risk and reward for some of these financial decisions that we make, or just career decisions in general, it is always really easy to look at the dollar, because that’s such an objective measure of success. But often I feel like pharmacists just have their blinders on and they’re looking at a very shortstarted, sighted mindset of, what’s my next step? Where is the paycheck coming from, but not seeing the long term implications of what is this risk going to play out in the long term? What is my career path going to look like long term? What are the opportunities that are going to exist for me in a certain role long term. So you’ve done a very good job of elaborating and eloquently explaining why this decision was so important and what this inflection point meant for you. So I want to again highlight the short sighted mindset that you said that you had with the financial decision and the career decision that you made, and how you just hadn’t trusted your gut. So it’s great that you had the opportunity to make that transition so early on in your career, but then talking about that tuition assistance program, so that was huge, that you were getting some assistance, and that you had to sign on bonus with this job, and you still decided to walk away and to pivot into something different, which ultimately changed the trajectory of your career. So kudos to you. As a very young pharmacist for, I guess, being prompted to move in a different direction.

Dr. Aaron Emmel 18:45

So I had help with that, by the way, so the encouragement of my girlfriend at the time now my wife, my high school sweetheart, she was right there to support me, and she could see and feel what I was experiencing, so she knew what was best for me and my peers and one of my biggest mentors, even to this day. So I did a lot of my rotations at the St Vincent’s Hospital System in Jacksonville. There was a wonderful pharmacy director there. He’s been retiring now for quite a bit of time, but Jim Makava, I did a couple of my rotations at his health system, and I was blown away by what they had been able to accomplish as a community health system, not an academic health system, but the level of clinical pharmacy services they had just blew me away. So I knew right away that was somebody I needed to maintain a relationship with and look up to. So he helped guide me in that decision, too. I called him many times as I was trying to decide what to do, and he helped, you know, he didn’t tell me what to do, but he asked me all the right questions to make me realize what I needed to do, and I had my one of my best friends that I met in pharmacy school had the same exact scenario as me, and we both went through this together. And I can’t speak for him, but he made the same decision I did, and he’s now a systems director for ascension at this at the systems level, and he’s had a wonderful pharmacy career, brilliant individual. So we both benefited, I think, from going through this pain together, the fortitude to make the decision now.

Corrie Sanders 20:28

It certainly helps not to go through things by yourself in any chapter of life, especially something as as drastic as this, to really change the trajectory of your career so early on. So something else I want to highlight too is that you had mentioned having a pretty significant lifestyle creep up to this point. So you’re spending money that you don’t have. You know, you’re looking at the what the paychecks are going to look like, but your financial literacy is not matching what’s going in and out of your bank account. So also, for our pharmacy student listeners, I think it is so important to highlight how necessary it is to be financially literate and educated as you’re making some of these decisions very early on in your career, especially with the significant loan burden that a pharmacist generally has. So that was a, I’m sure, a tough learning lesson for you, but ultimately set you up for Financial Success down the line when you were able to reflect on on some of those changes.

Dr. Aaron Emmel 21:19

Yeah, it did. I mean, the education that came from that invaluable. Sometimes I look back and I’m like, Oh man, like, I’m in a great place now, and I’m grateful for that. But how much of a better place would I be in had I done things a little better for that 10 year period?

Corrie Sanders 21:38

So then Aaron, I want to move from making that initial career transition so switching from community pharmacy being given the opportunity to navigate your way into inpatient and then ultimately staying within the Flagler Institution for a significant amount of time, working your way from a staff pharmacist to a clinical pharmacist, up through the leadership team and then your next big career transition is moving from the hospital setting to pharmacy industry. And you said something to me earlier that really struck a chord with me was that, you know, a lot of pharmacists call industry the dark side of pharmacy, or going to the dark side, or some of the misconceptions that you had. So let’s talk a little bit about that decision. And I know in your initial summary of your career that you were just talking about the work life balance at the hospital setting, but I really just want to dive into the financial implications of that transition, and then what ultimately went behind making the jump from the hospital setting to the industry setting?

Dr. Aaron Emmel 22:47

So the biggest impetus, I would say, for me, making that change had everything to do with work life balance, you know. So if I rewind the clock to late 2017 as I’m thinking, I’m going to have to make a pivot. I’ve got a one year old, and I have a three year old, soon to be four year old at the time. So I’ve got little girls. I’m realizing the importance of being present and the fleeting nature of this point in time that you know, I didn’t want to miss out on and also, it wasn’t just the time to it was the level of stress and and the impact of that stress on my behavior and, wellbeing at home, and, you know, me and me and my wife, Allison, we had many talks about this. We knew this wasn’t sustainable. Sustainable both from just a family time together standpoint and from a health of our family unit standpoint. So that decision I made to go to industry based purely on that. I mean, I was all in. So I had, I had a game plan for all the jobs I was going to apply to, you know, a game plan for how I was going to interview and get in front of people. I didn’t have any other factors. I mean, I knew I was going to do this, my assumption at the time, because I was an executive director at the tail end of this period. So I’m making a pretty good salary that at the health system level, and I’ve got great benefits. I mean, I’m getting like, 36 days paid off a year, you know, all the ancillary benefits that come with being at the director level at the hospital. I didn’t think I was going to be able to match that, to go and just be an individual contributor, medical science liaison to start in the industry. So I made that decision, thinking, once again, I’m going to be taking a pay cut. Well, when I interviewed for my first job, I didn’t negotiate at all, and I got an offer after the interview, and it was a pay increase, and the benefits were incredible. I couldn’t believe it. I just never forget I stepped outside to take the call from HR, and they gave me the offer. And I came back in. I misunderstood at first, and I said, Wait, it’s this much, you know. When I came in and told Allison, I said, you’re not going to believe the offer I just got to come do this. And she’s like, well, you’re going to do it anyway. You better do it now. So I will say, from a financial standpoint, I was committed to do it yet again, because I wanted to just have a different experience and a work/life balance and be more present at home. But it turned out to actually be an improvement financially. And importantly, I will tell you, it gave me the time and energy to be able to do additional things as well. And again, while making the decision to go to from retail to clinical was the single most important decision in my entire professional career, this decision and just the way that things happened, completely changed my life financially. And it’s not because I made, you know, 10% more going from the director role to industry, but because of everything else that came with it. So I had done consulting before, and I My mind’s always racing. I’ve always got ideas. So I would always chase you know, opportunities and make pitches for doing these short term consulting arrangements, but when I left, there was nobody to fill my shoe my shoes at the hospital, then nobody that understood how to run the quality program. So they asked me if I’d be willing to stay on as a consultant to advise them and help them run the operations to execute the quality program requirements. I got approval from my new employer to allow me to do that, and that additional consulting income that I got for doing that, which, by the way, from a time in to dollar amount ratio at the time, I felt bad because I just didn’t understand how these things were valued, and I my business education has increased substantially since then, but I wasn’t making all that much less than I was getting paid, you know, as an employee, to essentially work five to 10 hours a month as a consultant. And that was income that was not factored into our budget so that additional money allowed me the opportunity to invest, invest in a new business, and put away money that we would have never put away before. So you know, I had done so much financial damage to myself in pharmacy school in the 10 years it took to dig me out of that hole, I hardly had a positive net worth, even going into that transition, and my life financially changed afterwards, because of everything else that came from being able to do things in addition to my employment.

Corrie Sanders 27:52

And that’s great reflection to hear. I love that you said, you know, you made this transition, not just for yourself, but for the overall health of your family unit. I think that that’s just a great lens to view any career transition through. Is not just looking at the professional aspect of it, but thinking again of the bigger picture and the others that are affected by your career. And I do want to give you kudos to I think you’re doing a great job of shifting your identity as a pharmacist, which I don’t think a lot of people do. They become so tied to: “I am a critical care pharmacist, and that is where I’m going to hang my hat for the rest of my career.” But you’ve done such a great job of not only being flexible throughout different positions, but really stepping back and taking a look at the bigger lens of your your career and what that ultimately means to your family. So I think looking at the logistics and the nitty gritty of that transition too – really helpful to know where the flow of some of those funds went. So you mentioned, you know, you put yourself in a pretty bad spot early on, but being able to leverage some of these new opportunities to give yourself some stable financial footing, and then what a great way, even if it wasn’t intentional, but to be able to capitalize on having a consultant position on top of a new position. So when you’ve already made a little bit of a career transition, but being able to dabble in consulting so early on. So how long did you maintain that consulting piece, and then ultimately, what has that turned into, if anything at this point?

Dr. Aaron Emmel 29:26

So still do it, and I’ve done it for other institutions as well. So I would say at this point, from in my financial picture, and I had this discussion too with Tim, just about my my mindset now, and I don’t want to get too derailed, but I’m not out there to make, you know, a bazillion dollars and, you know, live on a mountain somewhere. I mean that my mindset at this point has become one of, I want to be prepared for anything I’ve. I could be in a position to retire pretty soon, if I really wanted to, but that’s not what I want. I want to be able to weather any storm, and I want my family to be set no matter what. So that’s kind of what’s driving me. And when I think of how to accomplish that, it’s just basically to make sure we’ve got enough income coming in, and a stable enough income where one income stream can go away or get hurt, but we’ve got enough other diverse forms of income coming in. So the way I view that is this consulting work, I found I’ve been able to string that along, and there’s many opportunities I could get after if I really wanted to. So that is a very important source of stable income for us at this point. We haven’t talked about the education business yet, but that one’s doing pretty good too. So that’s a nice right now, stable form of income. I view a lot of external threats to that, which is why I feel the need to diversify income from investments. And right now, I’m focused more on real estate as a better cash flowing vehicle for investing income. So I want to grow these three as much as I can, and that way we have a very diverse income stream coming in. So the consulting piece has been excellent. And the thing that I have learned about consulting and where these opportunities come from, they come from doing a good job and building really good relationships. And I hope not getting too sidetracked here, but I think it’s important for the listeners to know that there are so many consulting opportunities that exist out there if you had the reputation and the experience to be able to present them or capitalize on them. So the consulting opportunity I got from the hospital came because I did a really good job with the quality program, and I spoke well, and I built great relationships with everybody, and they knew I can fulfill that need very well. They can count on me to do it. That’s why that opportunity presented itself, and we’ve done really well. And I say we because my wife, Allison, helps with that. She’s a nurse, and she does a lot of the chart reviews and quality abstraction we do as part of the services we provide. So that’s one and because of word of mouth and the ability to reference some of the key stakeholders and physician leaders, additional opportunities come with that. The other thing, and it might be a little early to talk about this, but you know, I exited industry employed employment in industry just recently, but I’ve already had opportunities come up to consult for industry because of all the relationships that I built and the fact that I did a really good job while I was in it. And those may end up being quite a bit more substantial than the ones that existed from the health system. And it all came from just always remembering that you have to present yourself well. You have to do good work. I do good work because I want to do good work. But there’s other ancillary benefits that come from that, just aside from just doing well in your employee role and growing that career ladder, so to speak.

Corrie Sanders 33:07

I think that that’s honestly been an underlying theme throughout our conversation so far, is doing a great job in the position that you’re given and creating and cultivating those meaningful relationships and realizing your value within whatever company or institution, it is that you’re performing in and then being able to leverage that amount of skill and those relationships as you’re navigating through different chapters in your career. But also, I think that you’ve done a great job of not only maintaining those relationships, but tapping into mentors when you need to, and seeking guidance and advice on what you should do next, or people that have gone through this experience yourself, so you don’t feel like you’re moving through these decisions in a silo. You feel like you’ve got that level of support and level of knowledge where you’re able to confidently make a decision and pivot as needed. So I wanted to point out those underlying themes too, but now I want to dig into So you’ve now been in industry. You’re leveraging some of these relationships, but you’re also given a lot of flexibility to pursue some ancillary interests on the side. So you’ve now got your consulting business, and I want to dive too into some of your other the other ways, you’ve diversified your financial portfolio. So you started investing in real estate, and you’ve also started a business. So let’s talk about both of those things, when which one came first? How did that come about? I’ll kind of let you take the floor there with with how you’ve gotten to this, what seems to be like a three pronged financial diversification portfolio strategy.

Dr. Aaron Emmel 34:43

Sure. So I have always been, I would say an entrepreneur at heart, I mean, and that probably just comes from my nature. I never stop. I mean, I’m up hours before anybody else in the house. Just so I can think of ideas and do work. It’s not, you know, work directly related to the objectives I had as an employee or a consultant. So the wheels are always spinning. And, I mean, I had iterated a couple of things over the years. My first try was back in 2010 I started a business essentially to do medication, therapy, management services. We don’t need to get too deep into the details on that one learned a lot of lessons about you know, what you need to do to be successful. One of those being having a target market that’s interested in your service. But we could always revisit that if needed. The way I wanted to do it, in my mind, wasn’t one that was suited to the market at the time, which was a really important business lesson learned. I had started an analytics business too, as I was starting to do all of the health system quality stuff when I was still an employee to health system. Didn’t really have the bandwidth to do anything with that, but after working in industry for a year, things were going well. I loved the job I was doing well, as a family, we couldn’t believe what that was affording, in terms of just the flexibility and work life balance, the fact that I was able to perform so highly yet still have such a flexible schedule. And even with the travel, and at the time, I traveled a lot. I mean, I was trying to get out there and do really well on the role, but the flexibility of being present when I was home, oh my goodness. I mean, the time that I gained, you know, with my family, good quality time, just couldn’t believe how well that was going. But at the same time, I had this energy where I’m like, man, you know, I really have the bandwidth to do more. So I really saw the need to try something again. I said, Okay, well, what is my skill set? Where is there an opportunity in the market? And at the time, you know, it was the concept of online courses and stuff was a growing fad and kind of the side hustle industry, and I had read all those, you know, side hustle kind of books, and listened to podcasts and lean startup concepts and things like that. So I landed on, well, why don’t I develop an online course for something? And I tried to think of all of my hobbies and expertise, and, you know, really, where was there truly a market that I could attack. And I fell back to pharmacy. I said, Okay, you know, maybe I could create, like, a prep course for a pharmacy certification, like a board pharmacy specialties kind of thing. You know, there was already a few solutions out there, and that, to me, was probably a little more than I wanted to tackle in my mind. But then the one thing I did in my market research that stuck out to me was really an opportunity for pharmacy technician education, especially tailored towards helping somebody become a certified pharmacy technician. And there wasn’t a lot of competition specifically in that online market at the time, there were a couple players that had done a really good job, but I thought, you know, I’m so ambitious, and I always execute things really well, why don’t I get throw something together and give it a shot? So I spent about a year while I was employed, and I had a conversation with my employee and my direct line manager at the time. I said, Hey, I’m going to try to do this. We went through the official process of conflict of interest and all that. They allowed me to do it. So I built an online education program. I learned how to do computer code, I learned how to build and develop a website. I could we could have eight hours of a podcast of everything I’ve learned since in terms of running a business and operating a business in this kind of niche aspect. But, you know, I built the entire curriculum, I had a few people kind of advise me in terms of making sure that it was something that would meet standards for pharmacy technician education. That’s a whole other conversation as well. But as an online only program. It wasn’t something I was going to be able to get accredited by ASHP, but the pharmacy technician certification board didn’t have a limitation in providing just didactic online education. So I pursued that, built the curriculum, submitted everything into the PTCB, got the approval for the course to be recognized by them, to qualify people to take the pharmacy technician certification exam. And after a year of hard work, click the button to launch the website. And didn’t really have much of a marketing plan, other than learning things about search engine optimization and different digital advertisements you can do, and didn’t get much traction for a while, but after, you know, a lot of work in terms of trying to tune up the website and get more visibility on it, slowly started to gain some business to customer market share in terms of people finding the website and paying for the course to go on and get certified. And I did all that on the side, and I shouldn’t say side, because I learned real quick it was quite a commitment in the way that I wanted to do it, and that, I would say almost, kind of turned into my primary focus. At the same time, I wanted to meet all the obligations of being an employee, and I worked very hard for a few years to be able to do all that together, but here we are today, and I got myself through the consulting and the income from the business. Those two things alone are more than enough at the moment for me to just be able to do those and not be able and still be able real estate stuff as well.

Corrie Sanders 40:44

So that, and that’s a great lesson, I think, for viewers and listeners to hear, is that you really bootstrap the business together outside of your W2 job with, I mean, truly bootstrapping. I think a lot of pharmacists that make the pivot into entrepreneurship aren’t doing the level of detail with coding and SEO optimization and all these different things you had to do.

Dr. Aaron Emmel 41:04

I mean, bootstrap. I didn’t even count the hours that I put into this, but I did and it was with a true business owner mindset now and being in a completely different situation from a capital standpoint. I mean, that’s not always the best way to launch a business, but because I had the bandwidth and I just did it, I’m grateful I did, because not only was I able to do it at a relatively reasonable startup cost, but everything I learned along the process made me an extremely nimble business owner in this space, because now, I mean, I understand all these technical things. You know, I serve business to business clients now too. So I’ve got health systems and a few GPOs and educational institutions across the country that I’m doing group contracting with, and there’s a lot of vendor credentialing requirements that come from that. And now I know more about cyber and information security than I ever did before. I would have known all these things had not spent all the time to learn it as I was trying to figure out how to build and launch this.

Corrie Sanders 42:19

Which makes you even more valuable in a way that you probably never imagined.

Dr. Aaron Emmel 42:23

Over the years, that you know they want to do something similar and wanted guidance. I’ve had people ask me to be a business coach to help them be able to do that. I haven’t latched on to that because I feel at some point you know, you have to maintain some focus. I don’t want to throw too many things out there again. Yeah, it’s I would say my biggest take home that I can think of from the audience, other than just being brave enough to make tough decisions that you know are in your best interest, is to just always try to do things the best that you can, and do them in a sense too, that the other important lesson that I’ve learned is to do them for the right reasons, and that’s, you know, to be mission and vision focused, and to build genuine relationships with people, and to have a primary goal of helping other people more than anything else. And that was another mindset that I go back 20 years ago, where I’m focused on the money that wasn’t the right reason. I mean, I had stories I could tell you of some of the feedback I got from preceptors and, you know, education factor, educational faculty about, okay, do you really understand what the pharmacy role is supposed to be like? And I didn’t have enough of an altruistic mindset at the time, but I’ve literally built my career ever since then on the concept of trying to do the right thing for people. So do all that and you do it well, opportunities come. That’s one thing I’ve learned, yeah.

Corrie Sanders 44:00

And that’s a great, I mean, career lesson, but life lesson in general, too. And I want to back up just a little bit to make it clear. So you’re in this position where you’re doing some consulting, but you’re still within the industry, and the business that you built out on the side, or what became your full time business was Pharmacy Tech Scholar. So that’s what you’re building up this platform to ultimately provide education and certification courses to pharmacy technicians that can be purchased all online. So for our pharmacists that are listening, that do work with pharmacy technicians, I want to give you the opportunity to just elaborate a little bit more about this business. What is the goal of Pharmacy Tech Scholar, who are some potential clients and and how have you envisioned, you know, where the business is going in a way that’s understandable to the audience, and hopefully, if they need some of those services, is, how can they reach out to you.

Dr. Aaron Emmel 45:00

Awesome. I wasn’t even thinking of having any kind of talk here. But so the mission is simple. It’s to empower anybody to become a certified pharmacy technician. So the opportunity that I saw at the time, and the one that I believe in very strongly, this comes from my own financial experience as well is that there’s such a demand for pharmacy technicians right now, and there is a massive supply gap that exists today. It’s been going on for years now. I mean, I could I hear all these things from employers that contact me of how hard it is for them to find qualified pharmacy technicians, and there’s a major gap between from a pharmacy association perspective, on the type of training and preparation that you want for somebody to go out in the world and be a competent pharmacy technician and fulfill the level of scope of practice that role can provide and elevate, elevate the profession as a whole. It’s a lot of training and education. So you know, if you look at the ASHP accreditation model, as the gold standard for pharmacy technician education, which which I believe in, and I support, it is robust, and it’s extremely hard to attain that accreditation status. And if you’re not an employer, and you do this to recoup the cost of running that program, you got to charge quite a bit, whether you’re a vocational school or secondary educational institution, for somebody to go through a training program. And I just in my mind, it’s tough for me to see somebody invest, you know, the 1000s or 10s of 1000s of dollars that education might cost to get out and earn what a pharmacy technician earns, quite frankly. And there’s been a significant increase in the pharmacy technician wage, even over the past three years, if you look at the Bureau of Labor Statistics data. But it’s still not one that’s equitable in terms of what the outlay would would need to be for that level of education and training to go out and make that money. So I’m trying to envision the path for what I’ve done and being able to fulfill at least the didactic component of the education that a pharmacy technician needs at a very low cost. And the whole goal of this is to empower anybody to do it without any financial constraint. So my goal is that somebody can, as an individual, take our program, then go on to take the pharmacy technician certification exam and get their certified pharmacy technician status, which in most states is kind of the barrier to entry that are lower to be able to register and get out into the world and start to get some on the job training. So that’s kind of the path that I see from an individual standpoint. If somebody wants to be a pharmacy technician, that’s a really efficient path to take. You get your didactic education in a very inexpensive manner. You get your rubber stamp. So you can go out and get employed, and the employer is going to take the impotence to give you that experiential training that you need. So that’s kind of, if I frame it from the individual or the aspiring pharmacy technicians perspective. That’s the vision that I have for where we fit into their journey. Now, what I envision in terms of going forward, how, how do we how do I our business. How does our business deliver that service and help meet the standard that the pharmacy profession wants to see for pharmacy technicians? So especially with this audience, if it’s mainly pharmacy professionals, you know, my goal is for us to be able to fulfill the didactic component of a fully accredited training program which needs to include simulated, experiential training. We’ve done a really good job building a very interactive and active, didactic learning experience because, you know, we have a multimodal learning system in our learning management or multi multimodal experience in our learning management system, from, you know, video lectures to self study material to we provide all the readings as well at no cost, student discussion board, interactive messaging with with me. I mean, I’m on hours every day communicating with all the students. We’ve got self study activities. We’ve got, like, different educational games and these different h5p modules on the site. So it’s a it’s a really holistic student experience from a didactic standpoint, and integrating a lot of active learning and adult learning principles. So what I like to think is that we’ve built pretty much the best experience you could get from a self study, self paced, online, didactic perspective, that would be a really nice supplement for any holistic training program. So it alleviates the burden from the employer, essentially, if you think about an employer based training program that didactic components covered, and then you can focus just on the simulation. An experiential piece of that, and the students are already going to have a good background of that technology to be able to then move on to those types of activities. Go back to my time at the hospital, you know, in the state of Florida, which is kind of ironic, because that’s where I’m at. It’s one of the states that you know that’s not enough. You have to complete an ASHP accredited program, or a fully, you know, accredited educational institution program. You can’t just do an online program and get certified. But at the hospital, we didn’t have the bandwidth to go out and pursue ASHP accreditation, and we had a really hard time sourcing pharmacy technicians because of that, and I believe that the hospital still struggles with that. I’ve been trying to think about how to approach them, to work out some kind of combo deal, but yeah, so that’s kind of what I’d say, is we can offer what I personally feel is the best didactic experiences you can get from an online self study program.

Corrie Sanders 50:58

It sounds like a really robust experience and a really, you know, detail oriented, hands on experiences that has a lot a lot of thought put behind it. I love, I think it’s so ironic, not only that you’re in Florida with whatever restrictions may exist for the technicians, but I love that you had worked your way so far from community pharmacy and then ultimately reflecting back to a service that can totally help community pharmacy, not only the inpatient setting too, with recruiting technicians, but in a way that can really serve the pharmacy industry as a whole with that gap in the market, and really seizing the product market fit for that specific opportunity with Pharmacy Tech Scholar. So once you’ve got that up and running as your side hustle, that’s now become a full time job at this point, when do you lean into real estate and divesting even further? Is that before or after the Pharmacy Tech Scholar component leveraging some of the other consulting salary or your salary as a hospital employee? What did that step look like with diversification of your finances and just in general, can you help paint a better picture of when you reached into some of these other avenues?

Dr. Aaron Emmel 52:07

Yeah, excellent question. And again, we don’t have enough time to get into all my financial thoughts and ideas at this point, but I will say I thought about investing in real estate probably starting about 2018, 2019, I didn’t really have the capital to do much at the time, and I’ve got a lot of opinions too, about all the, you know, flashy real estate podcasts and ideas about all these crafty ways to invest in Real Estate. But I started to build my education around that time, probably way too much. So I certainly suffered from analysis paralysis. So I mean, I probably consumed 50 to 100 books on real estate investing build all these financial models on the side, because I’m a geek like that. But it wasn’t until really a couple of years ago, that I started to set some real goals, because I didn’t really have the capital to do much until then, at least in addition to all the other investments I had, I didn’t want to be able to pull out any money that I already had invested. And the rationale in my mind, was, ultimately, I want to get to a point where it’s just the investments that that fund, you know, the expenses that we have as a family, not because I don’t want to work or do anything anymore, but that, to me, puts us in a position where we can weather the storm no matter what happens. And I just don’t think any of us know what the world’s going to look like in five to 10 years. Five to 10 years or 20 years or 30 years, and to me, the more I can do to put our family in a situation where we’ve got that buffer. I’m doing my job. So the problem that I saw was that most of my or all of my investments, are in these tax protected vehicles that come with substantial penalties if you tap into them. So, you know, 401K, 403b, 529, plans for the kids health savings accounts, I had built up a pretty good nest egg, I would say, for my age as of a few years ago. But they weren’t producing any cash flow I could realize. So I made the decision on my mind that all the excess income that I have now, I’m just going to start investing in the real estate assets that ultimately I can get to the point where they’re cash flowing. And it’s cash flow that I can realize. And there’s some tax advantages to that too. So there’s not like, a huge additional tax burden that would come from that. In fact, I’ve got a situation this, this last tax season, where it was highly advantageous the way I did a couple of the investments, but that was the thought process. I didn’t execute my first real estate investment until early last year. And help focus me, if we need to stop me and ask me questions If you need but I went through all the different asset classes of real estate in my research on where can I put money in a real estate investment vehicle that’s going to produce both a very safe return overall and will cash flow? And I had a hard time finding anything, and maybe because I didn’t have the bandwidth to do a ton of lead generation. I mean, the to really generate, you know, major opportunity leads is a lot of work and a lot of investment in marketing. And I’m doing all this on the side. I don’t want to create another full time job for myself. And, you know, I couldn’t find anything in my area on the MLS, whether it was a multifamily or single family residence that pInned out from an investment standpoint, that would meet my metric criteria, I started looking into commercial assets, same thing with everything that was on LoopNet or that you could publicly find for commercial properties. And it wasn’t until I met somebody to become one of my best friends, whose kid was in my my youngest daughter’s class, and told him about my aspirations to invest in real estate. And he was a commercial real estate developer, so we started bouncing a ton of ideas around, and made the decision last year to do a couple of investments out of town in South Carolina for some commercial properties. So I did a couple of investments up there as a partner in a venture LLC for two retail complexes in South Carolina. And both of those, and these are pretty large outlay what many people would consider to be high risk investments, but they were such great opportunities at such a low acquisition cost that there was so much buffer for things to go wrong, and things have gone wrong, and even though they’ve gone wrong, you know, we’re still standing to make a substantial double digit rate of return, whether we refinance those this year or dispose of them in the coming months, the coming years. Well, so lots of thoughts. I mean, there’s so many things I could discuss about that, but ultimately, I made the decision to do this more as a passive partner, because I didn’t have the time or bandwidth to really pursue an active real estate investment with a strategy that was going to generate an investment that performed well from the outset. I think there’s a big misperception in my opinion, of people that think they can just go out and buy a house or a duplex and it’s a good investment. If you’re looking at the market, and whether you’re paying all cash or you’re leveraging it, especially these current interest rate environments, you’re probably going to lose money, or you’re probably at least in the near term, without knowing where inflation is going to go, you’re better off putting that money even in a money market account right now, unless you’ve got a really sound investment and you really understand the capital requirements of what you’re doing.

Corrie Sanders 58:08

And again, it’s so nice to hear that one you had already kind of financially leveraged, you know, with all these different forms of income, the ability to start investing in real estate a little bit later in your career, but ultimately, the ability to do it in the way that you did came from another relationship that you had made and some more conversations that you had had with people that are like minded. So I want to point to a couple different things, and then we’ll try to summarize it all up and with some clean takeaways. But I think overall, just listening to your journey one, you are great at doing different ways of self reflection. I feel like you’ve got a good head on your shoulders with where am i right now and where do I want to be? And then, if those two things aren’t aligning, for whatever reason, you’re another great example of you know, there’s no perfect time for a shift. There’s no black or white idea of when you have to be a certain thing in the pharmacy profession, but being able to have a shift in mindset or a shift in your career at any point in time, just based on what feels right and doing the right thing and working really hard has opened yourself up for a lot of different opportunities. So to summarize things up, we started in community pharmacy. We pivoted to that inpatient setting, and then ultimately switching into industry, and once you had some financial leverage, really working on diversifying that financial portfolio, so then reaching into real estate, looking at some of those hard and soft skills that you had developed from different points in your career and leveraging those in a way that was financially advantageous, but being able to eventually walk away from a W2 job because of these different diversifications that you had built with both the business, Pharmacy Tech Scholar and then some consulting. So anything else that you know you want to highlight in your career that you think would be useful to our listeners that, before we summarize it even further?

Dr. Aaron Emmel 1:00:10

My goodness, there’s so many things. And again, if I, if I take your kind words about my my ability for reflection, I would say the other important lesson I’ve learned is to have, at least in my own history, the need to have a higher degree of respect for everybody else around you and the things that they know. So that was my other lesson that I’ve learned over time, and I’m on a continual path with this, is, you know, when I got out into the hospital and here I am. I think I’m so smart, I didn’t even do a residency. I mean, I know everything right, and I had that mindset. I was so judgmental if somebody didn’t review something, or they let this medication get verified, or, you know, I assume none of the physicians knew anything about anything they were prescribing, but I have since come to learn that I don’t know as much as I think I know. That’s still true today. I’m always trying to learn more, but I missed out, I think, on a lot of opportunities to learn from other people early on, because I had that brazen mindset, and I would say it served me well as the years have gone by to have a more grounded perspective that other people know a lot more than I thought they did, and probably more than I do, and the ability to learn from other people and having that mindset has really served me well. So that was my own personal thing. That’s probably too many of your readers, but I would say that to me, and you noted too, with all these inflection points in my journey has had just as much, if not more, to do with the other people around me than it’s had to do, and I definitely come to understand that better now, and that circle could have been much bigger, And I could have learned much more had I been a little more introspective, I would say, and empathetic as well with everybody else in my space.

Corrie Sanders 1:02:10

No, that’s so beautifully said. Everyone’s got something to teach you. It’s just whether you want to see it or not. And the last question Aaron that I’ll ask, we’ve talked about a lot of different resources that you tapped into, so mentorship from a very early point in your career, you talked about consuming a lot of books and a lot of podcasts. Is there any other useful vehicle in your entrepreneurship journey that you want to point out to the listeners? Anything that you tapped into, or maybe your most valuable resource to this date.

Dr. Aaron Emmel 1:02:44

Letting go of the fear of failure, I would say that’s a big one. And I’ve failed quite a bit, and I continue to fail, but every time you do that, it’s an opportunity to learn something, and don’t be afraid to put yourself out there. That’s the other thing that I still struggle with today, we spoke before we started recording, about, you know, I’ve recognized the need to be more present socially, at least in terms of social media and stuff. And it’s got more to do with my, I guess, lack of like excitement around being that publicly visible. But if you want to succeed, I mean, you have to have a brand you know. You’ve got to be out there. You can’t be afraid of what other people think you know. And that’s something that I try all the time to let go of, and I still need to work on. It’s so important. If you’re going to be putting something out there that’s new, or putting something out there that’s going to compete, you’ve got to be fully behind it and fully visible, and you’ve got to be willing to just look stupid if you think that’s the way you’re going to look, but just put yourself out there.

Corrie Sanders 1:03:47

Well, on that note, Aaron, if people want to find you, what’s the best way for them to get in touch with you?

Dr. Aaron Emmel 1:03:53

You can find me on LinkedIn, it’s AaronEmmel. No period. My tag on LinkedIn. I just now put up my own personal website again from many years back. So themedicineguy.com There’s no content on there as of this minute, but hopefully in the coming weeks, we’ll have some I’ll have some stuff on there as well. And that’s also my Twitter/X handles @themedicine guy. Haven’t been tweeting since 2020 but again, I’m going to try to get active.

Corrie Sanders 1:04:21

Well, that sounds great, and there’s this has been such a beautiful conversation, I feel like there’s a lot of great life lessons worked into a lot of this professional journey. So wanted to say thank you again for taking the time to be here with YFP, and wish you all the best. Thanks, Aaron.

Dr. Aaron Emmel 1:04:37

Thank you. Corrie. I really appreciate it.

Tim Ulbrich 1:04:41

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

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YFP 373: Pharmacist’s Playbook to Buying Your First Home with Nate Hedrick

Posted on August 22, 2024August 22, 2024 by YFP Media

Nate Hedrick, the Real Estate RPh, discusses six key steps in the homebuying process for first time buyers.

This episode is brought to you by Real Estate RPh.

Episode Summary

Nate Hedrick, the Real Estate RPh, joins the show to talk about the pharmacist’s playbook to buying your first home. He discusses six key steps in the homebuying process including:

How to determine if you’re ready to buy
Getting clear on what is most important in a home purchase
Key individuals to have on your homebuying team
Factors to consider in choosing a loan
What is/not negotiable in today’s market
What to know when it comes to inspections, insurance, and closing

This episode is brought to you by Real Estate RPh.

About Today’s Guest

Nate Hedrick is full-time pharmacist by day, husband and father by evening and weekend, and real estate agent, investor, and blogger by late night and early morning. He has a passion for staying uncomfortable and is always on the lookout for a new challenge or a project. He found real estate investing in 2016 after his $300,000+ student loan debt lead him to read Rich Dad Poor Dad. This book opened his mind to the possibilities of financial freedom and he has been obsessed ever since. After earning his real estate license in 2017, Nate founded Real Estate RPH as a source for real estate education designed with pharmacists in mind. Since then, he has helped dozens of pharmacists around the country realize their dream of owning a home or starting their investing journey. Nate resides in Cleveland, Ohio with his wife, Kristen, his two daughters Molly and Lucy, and his rescue dog Lexi.

Key Points from the Episode

Home buying process [0:00]
Home buying in a changing market with a focus on rent vs buy decision. [2:46]
Budgeting and affordability for first-time homebuyers. [6:50]
Financial readiness for pharmacists considering homeownership, including budgeting, ongoing costs, and prioritizing what’s important. [10:17]
Real estate agent roles and changes in industry regulations. [16:52]
Real estate agent commissions, pre-approvals, and loan options for home buyers. [21:41]
Home buying process, including pre-approval, loan selection, and home negotiation. [28:01]
Home buying process for first-time buyers. [34:47]
Home buying process and budgeting with a real estate expert. [41:10]

Episode Highlights

“Taking a step back and spending 30 minutes to figure out what your budget actually looks like, can go so far in terms of the long term affordability and giving you flexibility down the road.” – Nate Hedrick [9:00]

“Regardless, whoever you’re working with, make sure you’re interviewing them. This is somebody that’s helping you make a huge decision and you want to have a good experience. Spend the time to make sure that you’re getting somebody really high quality and somebody that you’re going to be able to work with.” – Nate Hedrick [18:38]

“You really want to have that pre-approval letter in hand up front. It’s a pretty simple process to get done, and it’s good for, typically, three to four months. And it’s really easy to renew. So it’s pretty simple, and something that everybody should be doing up front.” – Nate Hedrick [27:43]

“Try to keep your budget criteria in mind. It is very easy if you’ve got a $300,000 budget to fall in love with a $500,000 house, right? Really try to restrict yourself from doing that because it’s just gonna cause heartache.” -Nate Hedrick [33:54]

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, Nate Hedrick, the Real Estate RPh, joins the show to talk about the pharmacist playbook to buying their first home. We discuss six key steps to the home buying process, including how to determine if you’re ready to buy, how to get clear on what is most important in the home purchase, key individuals to have on your home buying team. Factors to consider when choosing a loan, what is and is not negotiable in today’s market, and what to know when it comes to inspections, insurance and closing. Let’s hear a brief message from today’s sponsor, the Real Estate RPh, and then we’ll jump into the show.

Tim Ulbrich 00:42

[AD] Are you planning to buy a home in the next year or two with the state of current home prices and mortgage rates? The home buying process can feel overwhelming, but what if you can leverage the knowledge and ongoing support of someone who has worked with dozens of other pharmacists through their home buying journey, all at no cost to you. I’m talking about Nate Hedrick at the Real Estate RPh. Nate is a pharmacist who has been a partner of YFP for many years now, and offers a home buying concierge service that can help you find a high quality agent in your area and support you throughout the entire process. So head on over to RealEstateRPh.com or click on the link in the show notes to schedule your free 30 minute jumpstart planning session with Nate.

Tim Ulbrich 01:28

Nate, welcome back to the show.

Nate Hedrick 01:30

Hey, Tim, always good to be here.

Tim Ulbrich 01:32

So you are fresh off a trip to Iceland. Give us the good details. How that came to be, and what was the trip like?

Nate Hedrick 01:39

Yeah, man, the Land of Fire and Ice. It was, it was really cool. So the short version of a long back story is that my oldest daughter for one of her goals this year, we do goals at the beginning of every year, and one of her goals was to go visit a foreign country. And so we were quickly informed by her that Canada doesn’t count, so we had to find an alternative. So we took her to the library, checked out a bunch of books and tried to, you know, weigh the budget options with her, and anyway, she focused it on Iceland, and we made it happen just just last week. And it was, it was really cool. It was a place unlike anywhere else I’ve ever visited. The the landscapes there just so unique. The travel there is just very, very different. But it was really cool, very worthwhile trip.

Tim Ulbrich 02:23

You and I were talking before we hit record of how cool of a first experience that is from international travel, right? It’s different enough, but there’s still some bridges where, you know, the kids can be comfortable and things so that’s great. Love that. And as our listeners know, we talk so often about this balance between taking care of the future and living a rich life today. What a cool example of that, Nate, and bringing the family into that. So I love that.

Nate Hedrick 02:45

Thanks. Yeah, we had a really good time.

Tim Ulbrich 02:46

So perhaps while you were there, maybe on the flight home, back back in the US, we saw interest rates drop here recently, I think you know, the lowest they’ve been in a handful of months. And what are you seeing in terms of the impact on that rate drop, something we’ve been anxiously awaiting, and how that would shake out in terms of all the people that are on the sidelines waiting to buy a home?

Nate Hedrick 03:10

Yeah, you know, I haven’t seen dramatic changes. In fact, I’ve still seen parts of our market that are still relatively slow. I think you know, what’s interesting about the rates in general, is they don’t tend to affect the day to day. I think they sort of affect these trends and these these movements, but without things changing, you know, two and a half percent overnight, you’re not going to see all of a sudden, everybody’s showing up to the bank for an application. I saw a stat float around this morning, something that the effect of even though rates are 1% lower than they were just a year ago, mortgage application rates are still down eight or 10%. So I think, you know, there’s, there’s some movement out there, there’s some improvement, but we’re not at a level where people are going to refinance yet. We’re not at a level where it’s so good that that it’s, you know, beating inflation, or anything like that. And I just think that people are slower to react, even as these rates start to get a little bit better.

Tim Ulbrich 04:03

Yeah, I’m really curious to see kind of where that goes. And as we’ve talked about many times on the show before, there’s a lot of interested buyers out there, and I think a lot of people that are itching to get into a home and we’ll see where the rate trends continue to go, and we’ll bring you back to make sure we’ve got the most up to date information for our listeners. So I think that’s relevant to our discussion today, because, as I mentioned, there’s pent up demand. There’s interest rates. I feel like there’s a lot of first time pharmacist home buyers that are out there, and they’ve been kind of stacking right on top of one another for the last few years. And so today’s focus is we want to go through a step by step guide, step by step playbook, if you will, to buying your first home, we’re going to discuss how to determine whether or not you’re ready, factors to consider prior to beginning the home search, how to select the home loan option that’s the best for you, and ultimately, what are those costs that are involved in buying a home, and what can and cannot be negotiated in today’s market? So Nate, before we get into those specific. Six let’s talk about the benefits of home ownership, because given the housing market that’s out there right now, a lot of people are questioning whether or not it makes sense to buy a home. And I think the rent versus buy question is getting some renewed energy for good reason. So how are you thinking about the rent versus buy decision? The rent versus buy calculation in today’s market, and someone making that decision, of course, knowing that every market is different.

Nate Hedrick 05:24

Yeah, it’s it’s always been a question, right? No matter what the market looks like, even when rates were crazy low, even when 2021 when home buying was at just an absolute fervor, it’s always a question like, is it better to wait? Is it better to buy now. A lot of it has to do with how stable are you looking for? How long are you going to be in that in that particular property? If you’re in a location for a year, and you’re doing your residency there, and you’re planning on moving out after that, it’s probably never going to make sense to try to beat the market, quote, unquote, by buying a house, selling it, hoping for the best, like you might make out it might be okay, but in almost all those cases, renting is probably going to be preferred. Now, as you move that timeline out a bit further, if you’re going to keep that property and rent it out, let’s say, or you’re going to move to a location that you hope to find a long term job, that conversation starts to shift, and it starts to become a conversation of how much do I have to put down? What are closing costs? What are all the factors that go into this upfront fees? And what is that gonna look like in terms of what I could rent this for? Because, as we’ve said, you know, rates are better. They’re still high, but rents have been going up too. So you’re you’re factoring into a lot of different pieces when making that decision.

Tim Ulbrich 06:38

Yeah, and you and I cover this. Gosh, it’s probably been 3,4,5,6, years ago? Now I’m not…I’d have to go back and look what episode it was! But actually getting into the weeds on that rent versus buy, very different market, of course, than what we’re looking at today. But one of the resources we talked about in that episode, we’ll link it in the show notes again, is the New York Times has a pretty cool rent versus buy calculator that really helps avoid that trap of I’m paying X for rent and the mortgage payment is Y. And comparing those right? There’s a whole another layer of cost and things that we want to evolve really evaluate to determine what’s the apples to apples, right, or as close as we possibly can get. So again, we’ll link to that in the show notes. So Nate, let’s jump into our six steps for first time homebuyers, the playbook for first time homebuyers. And if listeners want to follow along and take notes, you can download our free YFP First Time Homebuying Quick Start Guide, and you can get that by going to yourfinancialpharmacist.com/homeguide. That’s all one word. We’ll link to that in the show notes as well. So Nate, step number one is making sure that you’re ready, building on the conversation that we’ve already started. And buying a home can be a great move, but dot, dot, dot. You got to be in the right position, and that really starts with knowing your budget and considering how the home purchase fits as a piece of the broader financial puzzle that accounts for other goals, such as student loan debt, of course, very common among first time homebuyers, making sure we’ve got the right reserves and emergency funds. How do we get started with investing in retirement savings? We have all these things that we have to consider. And of course, the home all, albeit a big one, is one of many different aspects of the financial plan. So tell us, from your experience as a first time homebuyer, it’s been a while and coaching many first time homebuyers through the process how the buyer and the bank really answer this affordability question?

Nate Hedrick 08:24

Yeah, I was just thinking it’s actually going to be 10 years since first time homebuyer status, just like this month. So, yeah, it’s been a minute. But, you know, I think this is probably the most boring part of this six step guide, right? But it’s arguably the most important. And I think people are like, up, skip it, budget. Don’t want to look at it. But I can’t tell you how many I meet with somebody every week and talk about this stuff, where, if you don’t set yourselves up for success, if you just jump into Zillow and say, I need a four bedroom house, and I already live in Cleveland, Ohio…beautiful, sunny day here in Cleveland, like this is what the house is going to cost. Rather than doing that actually taking a step back and spending 30 minutes to figure out what your budget actually looks like, can go so far in terms of the long term affordability and giving you flexibility down the road. One of the things that, again, we lucked into, because again, 10 years ago, I had no idea what I was doing. We bought a house that was, you know, less than than max, right? We way undercut what we could have possibly spent on a house, and now we’re still in that same house 10 years later, and couldn’t be happier because we’ve got this nice, reasonable payment. So even as Kristen and I have cut back a little bit on work or taking trips to Iceland, the housing is so much more affordable. And I can’t tell you the number of pharmacists that I’ve talked to that didn’t lock into that right, or went the opposite direction and said, I’m going to spend as much as I can. I want this big, nice house, and then they’re paying for it later, and it becomes problematic. So it’s something I really encourage people to do, take a hard look at the numbers and and it will benefit you in the long term.

Tim Ulbrich 09:57

You know, I was thinking of Nate as you were talking a webinar I did several months ago, talking about budgeting. And as you said, right? We bring that topic forward, and people are like, end episode. I don’t want to talk about this anymore. But what was interesting is I had several pharmacists ask them to submit their budgets in advance that we would share anonymously if they were comfortable doing so. And I kind of analyze them, talk through them. And to no surprise, one of the things that we saw is the percentage of income that was allocated to fixed costs – very high, right? And then the home, of course, tends to be along with student loans, along with car payments, along with child care costs, which is probably the big four, as I see them. But when you’re talking about a 30 year decision that for most people, is a fixed payment outside of some of the taxes and other things that will increase over time, like we’re locking in a big piece of the financial puzzle, right? And so easier said than done in today’s market, totally get it, but we want to make sure that we’re not putting ourselves in a situation where we’re looking up a year or two years later saying, Hey, I make a great income, but I don’t feel like I’m progressing. Because one of those big reasons, at least being that home purchase.

Nate Hedrick 11:08

Yeah, I think that’s, that’s spot on. And I think that it’s, it’s, again, it’s very easy to sit here and say, right? It’s easy to say, look at the budget, don’t spend too much. But then I again, I can’t tell you the number I’ve talked to, where they look in their market, and the only option is to spend 35% of their income on a house for them, like they need three bedrooms. Is all that’s going to fit. So I think it’s a lot easier said than done, but you have to at least have a wrangle on those numbers so that you can start making an informed decision, rather than just jumping in and hoping for the best later on.

Tim Ulbrich 11:36

Yeah, yeah. And to your point, if that is what it is in the market, like, what else can we be doing in the financial plan to make some shifts or adjustment, knowing that, hey, that’s just going to be a big part, because you and I both know that pharmacists salaries don’t adjust necessarily with cost of living proportionally, right?

Nate Hedrick 11:50

100% that’s one of the risks.

Tim Ulbrich 11:52

You know think this making sure you’re ready, portion also includes, we’re in looking at all costs of the mortgage, right? Nate, I think my experience, personally, going through this and talking with many pharmacists is most folks are probably thinking about what’s referred to as PITI, right, principal, interest, taxes, insurance, but might stop there. What else should they be considering, both one time and ongoing costs when they’re they’re trying to answer this question, Am I ready?

Nate Hedrick 12:19

Yeah, the big ones that I missed in terms of ongoing were the property taxes. So when I was a renter, I didn’t really think about property taxes. I didn’t have to pay property taxes. I knew they were a thing, but I didn’t really like factor that in. And often it’s tucked into your mortgage. But what you don’t realize is that those property taxes can go up, right? So those are going to be reassessed. In fact, here in Cuyahoga County, we just had our reassessment done, and everyone’s property taxes increased. So even though I haven’t sold my house in years, it still does go up over time, and tends to go up every year. So there are little things like that that are easy to miss, even something like utilities, for example, if you’re a renter today, and maybe utilities are baked into your rent, maybe it’s even just a couple of utilities. Maybe it’s just gas or the water and sewer bills, but all those are your responsibility now. And so if we had a really hot summer like this and our electric bills were through the roof because we’re paying for the air conditioning, that’s just that comes with the territory of homeownership, and it’s something that is difficult to calculate, but you have to kind of plan a little bit of buffer for those kind of things, because now they’re all your responsibility once you take on that homeownership.

Tim Ulbrich 13:24

Yeah, and those ongoing things, to me, are so important, right? Because when we talk about, you know, fixed costs in the budget, that we’re going to try to move other pieces around, you know, utility costs, you nailed that. Obviously those have gone up, I think, across the board, property taxes, I know, for us here in the Columbus area that’s been huge. We actually have a commercial property, our office space up in northeast of the city. And we bought that property in 2021 and property taxes nearly doubled. And, you know, and, and so those are the things as an investor, you know you’re thinking about, but you’re not thinking about doubling. And great, the property value has doubled. But guess what? Like, one is related to monthly cash flow. One is not, right. So at least in this moment. And then I think the homeowners insurance increases we’re hearing about all across the country, Nate are huge. I don’t know if we felt that as much here in Ohio. I know we’re hearing from people in Florida and other parts of the country that are more prone to natural disasters that they’re seeing some more significant increases, but these are the things that we want to be thinking about that breathing room right when we’re making this decision about, Hey, are we ready to purchase a home or not?

Nate Hedrick 14:28

Yeah, you hit the nail on the head. I mean, David and I just did an episode on the REI podcast about insurance, where we talk to an insurance agent. And it’s incredible to hear some of the stories around the country of carriers that are pulling out, carriers that are doubling policy costs. I mean, it’s, it’s pretty incredible. So it’s definitely those. Those things are not something to ignore, and even if they’re a little difficult to calculate, you have to at least plan for them.

Tim Ulbrich 14:50

Yeah, that’s right, all right. Number two on our list of six steps in the playbook for pharmacists as first time homebuyers is determining what’s important. So once. We make sure we’re ready financially, it’s really time to determine what’s important. What do we want? What’s top of the list? What’s maybe a desire, but not at the top of the list? So Nate before keyword, before we start the search. How do you think about narrowing down this list of the must haves to a few key areas?

Nate Hedrick 15:18

Yeah, and I think part of this is not just you personally knowing, but if you’ve got a spouse involved in the decision, or you’ve got someone else involved in this process, it’s how do we all get on the same page? Right? One of the things I’ll often do with couples who are buying house together is I’ll send them both these must have sheets and let them fill them out separately, and then kind of come back together.

Tim Ulbrich 15:39

That’s cool.

Nate Hedrick 15:39

Yeah, it’s neat, and it’s fun to see what they put on paper, because a lot of this is, like stuff you talk about, but when you’re doing it separately, and you have to, like, write it down, and then it’s like the newlywed game, right? You get to see what they actually write down. You’re like, wait, what, you want that? I didn’t realize how important that was to you. And so kind of assessing those things can really make a difference, especially if you’re taking a step and looking at all this stuff before you hit search and you say, look, hey, we’ve got four kids, and so we need a five bedroom house, or whatever the you know, the math works out to that can drastically affect things like your budget or where you’re able to buy. You might not have five bedroom houses in the in the neighborhood that you want to look in, right? That might not be an option. You might have to build. You might have, you know, so it really changes the dynamics of how you’re going to search, and it affects a bunch of other things down the line. So again, if you’re looking at, let’s say you’re looking at, you want area for your horses. We just rode horses in Iceland for the first time ever. And so if you’re like, I need to have my Icelandic horse as part of my house property. That’s a very different location, very different agent, very different financing, all those decisions that play out after that change because of that decision of what is most important to you. So you have to have that kind of criteria established upfront.

Tim Ulbrich 16:04

And I think knowing what flexibility Nate exists or doesn’t exist, or are some things non negotiable, right? Maybe that’s the number of bedrooms, whereas other things you’re like, Hey, I’d love if we could have X, Y or Z, you know, the finished basement or a pool or a fenced-in yard or whatever. But maybe it’s not a hey, it has to, because I think that really helps with the agent relationship. We’ll talk about that here in a little bit, and really making sure that person has the information they need, that they’re not wasting their time or your time, you know, sending a bunch of properties or going to visit a bunch of properties that ultimately, you know, aren’t the right fit.

Nate Hedrick 17:22

Absolutely.

Tim Ulbrich 17:22

Speaking of agent, let’s talk about number three on our list of six steps, which is, assemble your team. Most first time homebuyers, I think, start their search like I did, which was driving by properties, scrolling listings online, but sooner or later, they’re gonna have to assemble a team to pull the trigger and ensure one of the, if not the largest purchases they’re going to make in their lifetime go smoothly. So Nate, talk to us about how the right team can make all the difference and who you’re thinking about as key team members.

Nate Hedrick 17:51

Yeah, I think this step always kind of feels overwhelming. Building a team sounds like a pretty serious endeavor, but what we’re trying to say is that you’re looking for individuals that are going to make the process easier and help you out. This doesn’t have to be a big, long, drawn out process. You want to make sure that you’ve got people that know what they’re doing to supplement right, just like you would on the team, rounding in the hospital or working in the pharmacy. You’re not doing all this stuff by yourself. You don’t have to know everything. You just have to have the experts in your corner. A lot of times, that’s going to start with something simple, either a lender or a real estate agent. Connecting with them, getting them to give you referrals to the other people that you might need, and then taking off and running from there. I do encourage people to interview whoever you’re working with, and we can. I’ve done webinars on this in the past where we go through like tips on interviewing an agent, for example, or tips on vetting an agent. But regardless, whoever you’re working with, make sure you’re interviewing them. This is somebody that’s helping you make a huge decision you want to have a good experience, and so spend the time to make sure that you’re getting somebody really high quality and somebody that you’re going to be able to work with. Well, yeah, I

Tim Ulbrich 18:51

think great advice. And again, this is something we don’t want to haphazardly walk into, and referrals can be helpful, but you know, your needs may be similar than someone else, different than someone else. So making sure you feel good about this decision and the people that are ultimately representing and working alongside of you. Nate, I think this would be a good place, just given the agent aspect here and talk about some of the changes that we’ve talked about in the podcast before, relating to the National Association of Realtors Settlement when we talked about it, three, four or five months ago is a hey, this is coming in the end of the summer, and here we are. So now that the dust has maybe somewhat settled, like, what? What is the impact that you’re seeing?

Nate Hedrick 19:28

if you ask our brokerage, we were like, in the middle of the dust, because it just went live, where these these changes are now in effect. And so essentially, what happened is that the National Association of Realtors was sued. They decided to settle without admitting any fault. And the big change that resulted from that settlement is one, they had to pay out a whole bunch of money, as is normal, but also they had to get rid of the buyers commission that was advertised in the MLS. So the way it worked up until a couple days ago is that if I was showing a house for a prospective buyer client, I knew that there was a 3% commission, or a two and a half percent commission that is being offered by the seller, and that when I write a contract, I’m going to get that as part of working with that buyer. That is no longer allowed. You cannot advertise that that commission agreement basically. What is now required is that that commission has to be negotiated. It has to be a part of the buyer’s contract so it doesn’t go away, it doesn’t change necessarily. It’s just the way that it’s going to be talked about is very different, and it’s going to be talked about upfront. So if you’re a buyer and you’re working with an agent for the first time, there’s going to be a conversation about, hey, my job is to negotiate and work for you, to help you guys find the best house, but as part of that, I need to get paid. And so there’s going to have to be a number. Call it 2%, two and a half, 3% whatever that is in commission that I’m going to try to be getting from the seller. And we’re going to agree to what that number is right now, as a process of working with me, my goal is to get that from the seller, right? I’m going to write a purchase agreement to you, Tim, and I’m going to say the house is $200,000 with a 3% commission. For me, my goal is to get it from that seller, but there’s a possibility they come back and say, I’ll accept $200,000 but I’m not paying your agent anything. And then we have to figure out what we’re going to do. And so that’s where we are today, where that’s sort of in limbo, and we’re going to kind of see how the market plays it out. The likely options at that point are going to be either we write the contract for a bigger amount, we write it for $200,000 plus 3% and then, you know, you finance that, or the buyers are going to have to pay that 3% out of their own pocket. I think that’s going to be not the norm. I think that’s going to be exception more than the rule. But there are a lot of changes, and we’re sort of feeling out what this is going to look like as as the time goes on.

Tim Ulbrich 21:40

And that last point you made, you know, in terms of, could this fall on the back of the buyer, right? I think that’s what most listeners that are looking at my home are wondering. And this is just such a stark change from you know, how we have thought about buying agents in the past, and, you know, I had a conversation offline a couple months ago of like, this really will, in my opinion, it’s going to take time, but this really will start to differentiate the value that a buying agent is bringing. And I’m a firm believer, and I know this from working with you and talking with other agents, not all agents, just like not all financial planners, are created equal. And when you think about the bar of entry into someone becoming a real estate agent, similar to someone else becoming a financial planner, like you know that bar of entry, you know, there is one but, but it’s not incredibly high.

Nate Hedrick 22:24

Its very low. You can say it!

Tim Ulbrich 22:29

And so really, then comes down to like, Hey, are you talking with an agent working with one that has experience? Like, how much experience? And what has that experience been like? And so this is really going to flip that conversation. And I think for buyers, is just so different, and I’m curious to know it’s so fresh right now, kind of how this shakes out and in this market Nate that we’re in, like that first option you mentioned, where, hey, we’ll write the contract and, you know, we’ll see if the listing, person selling the home, will ultimately pay it like, you know, arguably, we’re in a seller’s market, right? So is, do you see that happening? Or what do you see happening short term?

Nate Hedrick 23:05

I think, I think yes, is the short answer your question. I mean, we’re doing that essentially today, right? If you think about again, it’s still that $200,000 house today, right now, that 3% is coming from the seller already. So, like, that’s not really changing. What I think this is going to do is going to provide a lot more transparency. Like you said, the barrier to entry on real estate is very low, and there were a lot of agents out there that would get their license, work with a buyer, knowing full well that it did not matter how good they were at their job, if they got someone to close, there was a guaranteed two and a half or 3% sitting out there waiting to be theirs, right? And I think the benefit of this change is that that that goes away, there’s no guarantee. You have to actually prove your value as a buyer’s agent now, and so I think that’s going to help the market overall. I just, I think it’s going to be interesting to see how exactly it shakes out.

Tim Ulbrich 23:53

Yeah, and this would be a good stop that I just want to pause and we’ll talk more at the end, but put a plug Nate for you and what you’re doing with your clients through the home buying concierge service. People can learn more RealestateRPh.com We’ll link to that as well as the site on YFP website, if you click on home buying on the homepage, you can get there, but you do offer value. Our listeners will get that from you know what we’re talking about here, and you have the experience. And you’ve done it, obviously, yourself. You’ve done it with many, many clients, locally. You’ve worked with a you’ve worked with agents all across the country. You’ve done this many times as an investor as well. And so I think finding that person, that relationship, that’s a good fit. You know, now more than ever, with these changes, is going to be so important so.

Nate Hedrick 24:37

I really appreciate that, Tim, and I think especially as more and more and more agents are going to require you to lock into a contract because that guarantee is gone, you kind of have to get it right the first time which, which sounds overwhelming, and I don’t mean that to be like intimidating, but you kind of have to get this one right. And so working with somebody that that has the experience you’re looking for, or being matched with somebody that we have vetted already. Can be a huge difference maker if you’re looking at buying a home for the first time, especially.

Tim Ulbrich 25:05

What do you think’s going to happen for the many people that are out there looking, who work with an agent but never actually go through with a purchase for whatever reason? I mean, is that? Like, will there be cost? I mean, there’s, there’s obviously cost of your time and stuff that now we’re looking at this relationship differently, like, will that still be no charge to the to the prospective buyer? What do you think that will look like?

Nate Hedrick 25:26

So I think there’s going to be a lot of people that try to get creative. I have already seen, and this is like on LinkedIn, so I don’t know how legit it is, but I’ve already seen some cases where someone will say, Look, I’ll charge $995 I’ll show you up to 15 houses, and I’ll negotiate one contract, and that’s the cost to work with me, right? And whether you buy or not, I don’t really care anymore. I think you’ll see people get started to get creative, but I think you’ll see the market probably wants to keep things as close to as they are now. So I think you’ll see people just negotiate these contracts with their buyers directly and then try to get them to negotiate with the sellers to pay the cost.

Tim Ulbrich 26:02

Yeah, I actually know an agent here in the area that’s doing kind of what you just shared. And I don’t know how widespread it is, but on a per listing fee, or it’s like a higher flat fee, you know, we’ll get you so many 10, I forget what it was, 10, 15, 20, but if you want to do it kind of a la carte, it’s per you know so curious to see where that where that goes. Yeah, all right, let’s talk about number four, which is choosing a loan, probably what many people are thinking about as a top priority. And before we talk about loan types, let’s talk about pre approvals, especially important in the competitive market that we’re in today. What is a pre approval? Why is it necessary? And what items are needed to get to that point of having one?

Nate Hedrick 26:43

Yep. So a pre approval plan plain and simple is someone, typically a lender, giving you a letter that is going to say, hey, there is a person out there willing to lend to this individual for a certain amount of money. So if I go with a pre approval letter to a seller and it says, I’m pre-approved up to $250,000 that seller has confidence knowing that that there’s someone else out there behind me willing to basically front that money. So it’s all that is, is saying that someone has basically vetted you and agrees to basically to back that up. The common misconception is, well, I don’t need that until I found a place, or I don’t need that until later. I actually just spoke with a potential buyer this past week, and she said, I said, Are you pre approved? You know, just want to get an idea. And she said, I wasn’t going to do that until I found the perfect house. Like, I don’t want to, I don’t want to waste my time and do that until then. The risk there is that if you find the perfect house, and there are five other people that think it’s the perfect house, and you’re not pre-approved, you’re not getting it right? It’s not going to be something that that we would even consider as a seller. So you really want to have that, that letter in hand up front. It’s a pretty simple process to get done, and it’s good for, typically, three to four months. And it’s really easy to renew. I renew mine all the time, even though, you know, we’re not, we’re not actively looking it’s just something to keep on hand. So it’s pretty simple, and something that everybody should be doing up front.

Tim Ulbrich 28:00

And in order to get a pre approval, you’re going to have to make a case to the bank that you’re a qualified lendee, right? So you’re going to be providing paycheck information, assets, liabilities, kind of a snapshot of your overall financial picture. But to your point about, you know, not waiting on the sidelines, like my experience is that takes time, depending on the bank, it might take more or less time, and you know how nimble they can be, but to be able to get all that information, upload it, for them to make a decision on that, it’s going to take time. So you want to have that in hand, especially given that that’s good for a period of time, definitely. So once we get pre approved and we’re ready at that point, you know how we go about the loan selection choice. It’s probably one of the biggest decisions that people are going to make in the process, and I think is confusing to navigate, given the differences that are out there in the products that are available, which can vary in terms of percent down payment that’s required, minimum credit scores, whether or not there’s private mortgage insurance or PMI. So talk to us about the common types of loans that are out there, and the key features of those loans.

Nate Hedrick 29:08

Yeah. I mean, this is, this is such a broad topic, we could do two episodes just on loans. I mean, you’ve had Tony on the show enough times talking about loans, right? Like this is such a big area of focus that, you know, the it’s, it’s hard to cover it all. But the basics are this, right? You’ve got to have some, you’re going to have some sort of product, and that product is going to be backed up by the bank in some way. And they can back that up through the government. They can back it up through like your job. They can back it up through federal programs, like you name it. There are ways for them to basically underwrite these loans. And the the qualifications within those underwriting underwritings are what determines things like your down payment, your interest rate, what houses you’re available to buy, so on and so forth, right? So typically, people are going to see one of three types, and again, there are 1000s of others. But typically you’re either going to have what’s called an FHA loan, or government backed loan, a conventional loan, which is sort of like your standard 30 year fixed rate loan, or you’re going to see like a pharmacist home loan or a doctor’s loan. That’s typical to our to our audience. And so any one of those have different pros and cons, different down payments, different interest rates, different terms, so on and so forth. But, but all of those are pretty viable, and again, pretty common for most people.

Tim Ulbrich 30:17

Yeah as you mentioned we’ll, like in the show, and so we’ve talked about, you know this at ad nauseam, in terms of the options that are available. But this is huge. I talked with a pharmacist, Nate last week that’s out in California. I want to say it was in the San Francisco area that is looking to purchase a home 12 to 24 months. Now, I asked a budget question, right? And I’m like, holding my breath. It’s California. So you know it was, hey, about $800,000 and then I asked the loan question, like, Hey, what are you thinking in terms of lending? No clue and no fault to their own there’s just, you know, not, not yet there in the process. But I was trying to really encourage them, like, start to dig in. Because when you’re talking about an $800,000 home and qualifying, and what a 3% or a 10% or 20% on a conventional down payment. We’re talking about either a ton of cash or still a ton of cash, but not as much cash, right? And how that fits in with, Hey, your student loans and all these other things that we’re trying to achieve. So this, again, is big, and probably for first time homebuyers, that down payment piece comes to front and center, because, right, they’re focused on many other goals, student loans, etc, that we’ve been talking about, and really making sure that you feel comfortable with the product. And you know, if you’re putting less down, are you giving up on anything, on rate or terms or other things, you got to look at the whole picture before you make a decision.

Nate Hedrick 31:33

Yeah, all good points and all things that are difficult and overwhelming to consider at times again, one of the ways that you can sort of make this a little easier is start to talk with your agent about this. If you start with an agent, if you know no if you have no idea where to start with a lender, start with an agent, and they’ll be able to refer you to a couple good agents. I can usually parse out, even though I’m not a lender, I can usually parse out like, hey, it seems like you’re looking for lowest down payment options, or you’re all about monthly payments. So these are the people that I’m going to start directing you toward, then you can refer them to three different lenders that they can have a meaningful conversation with, rather than starting from scratch and just Googling, you know, local lender near me. So that’s a good way to get started if someone doesn’t know where to start.

Tim Ulbrich 32:13

Good stuff. Alright, number five on our list is find your home and negotiate. So at this point, we’ve determined what’s in the budget. We’ve narrowed down the list of must haves. We just assembled our team. We’ve gotten pre approved with the lender. We know the product we’re going to be pursuing. So now it’s time to get serious with looking right? So talk to us about what’s involved in this step, and especially in today’s market, like, what is the reality of negotiation?

Nate Hedrick 32:36

Usually this is where people start, right? This is step number one. Is find your home. Like open Zillow and look for your favorite house. So it’s funny that we’re waiting all the way to number five to get there, but it shows the importance of the prep work, right? Because it’s how you’re going to do this successfully. So right now, there are a lot of ways to search for homes, right? You’ve got Zillow, realtor.com, you’ve got Facebook Marketplace, the MLS, which is where realtors are posting their sites. All of those are great options, and really, there’s no wrong answer. I think the thing to keep in mind is that there’s sometimes a preconceived notion that if I’m working with an agent, they’re going to go find me a house, right? They’re going to find me a property. With the way things are set up today, with the automatic emails that you can get with the notifications you can set on Zillow and realtor and all those, it’s typically much easier to to set criteria yourself, or give those criteria to an agent and allow them to build you an automatic email that’s going to be looking for the houses that might fit your criteria, and then you be the one to decide, does this? Does this make sense? So I think that’s something to kind of just put in people’s heads, because I’ve talked to some out there where it’s like, well, the agent, you know, is trying to find me a house, but, but I’m not having much luck. It’s like, well, be involved as well, because they can do a lot, but, but you can often do just as much with with some of the tools that are out there today. So that’s that’s kind of part one. Part two is to try to keep your criteria in mind, right? We did all these steps one through four up front for a reason, it is very easy to, if you’ve got a $300,000 budget, to fall in love with a $500,000 house, right? Really try to restrict yourself from doing that, because it’s just gonna cause heartache, right? It’s much easier to start to stick within your parameters and roll from there. So those are just some kind of key tips when you get started with the process. When you’re actually looking at homes, that’s when kind of the rubber meets the road, where you’re going to be doing the bulk of the legwork to see, do I see myself living here? Are there? Are this is actually meeting the criteria that I was expecting? Does this match the pictures? Is it matching the things I’m seeing online and so forth, and then relying on your agent and eventually an inspector to help with things like, is this a problem, or are we worried about X, Y and Z?

Tim Ulbrich 34:47

Makes sense. And I think what’s challenging this a little bit right now is, you know, we’ve seen in our area, I’m sure, all across the country as well, is, you know, in terms of the competitiveness of the market cash buyers that are out there. Or, you know, appraisal gap waivers. That are happening, lots of things that are competing with, with people trying to purchase a home is, you know, you might set that budget at the very beginning at $300k even if you hold the line and you got the filter criteria at 300 right there, there could be a, you know, that home maybe goes at asking, slightly below, maybe, depending on the market, perhaps above it, right? And some other cash that’s needed to close it well. So every market, of course, different, but I think it’s hard right now, just given where it is, and I think all the pent up demand to really hold tight to that budget.

Nate Hedrick 35:33

You mentioned it perfectly. It’s very market specific. We have areas here where that, you know, over asking isn’t happening anymore, and other areas where every house that pops up, I don’t care how badly they take the pictures, it’s flying over asking price, right? So it depends pretty heavily on the market and the location.

Tim Ulbrich 35:49

And that’s within Cleveland? You’re talking about, like, different communities within the area?

Nate Hedrick 35:52

Even within Cleveland, yep, for sure.

Tim Ulbrich 35:53

Yeah, that’s interesting. All right. Number six, Last on our list, Nate, inspect, insure and close. So we’re under contract. It feels like we finally have crossed the finish line, given the steps that we’ve covered up until this point. But there’s some more important details remaining that are in between the accepted offer and the keys in hand, that being the inspection, consideration for a home warranty and closing tell us more.

Nate Hedrick 36:15

So I always say this to my clients, that there’s two parts of buying a home that feels scary, and Part one is putting in an offer, because it feels very final. It feels like, once I put this in, like that’s it. But the reality is, is that the second part, when you waive inspection contingencies, that’s the actual, like, serious, scary part, right? Because that’s when your earnest money goes, goes solid, and you can’t get it back. That’s when, essentially, you are buying that house. So there’s a period in there, that inspection window that you have a chance to do some really good due diligence. Usually it’s seven or 10 days, if you’ve negotiated that in, hopefully your agent is helping you do that, and during that time, it’s really your moment to figure out, does this actually work, right? Are there things in the house that we’re worried about? Right? Is the roof caving in? Is there water damage in the basement? Is there you know, properties going up nearby that we’re concerned about. All of those pieces are pieces you want to be spending time to do that due diligence on, because there’s going to reach a time where that it’s too late to really do that stuff down the road. So it’s, it’s the moment to get all those things figured out. And again, you mentioned insurance in there, there’s also a piece of like, contact your insurance agent and figure out what your costs are going to be for this specific house. That’s still part of your due diligence. And so many people I talk to wait until the very end to do this insurance piece, and then they find out, Oh, well, it’s got an old electrical system, and actually the roof is 20 years old, and they won’t insure it or it’s in a flood plain. I mean, you name it, right? So, so do that due diligence during the time period that you’ve got, because it’s super important. And it really is the the the actual last thing before the scary step of waving everything,

Tim Ulbrich 37:52

You know that that’s what made me so nervous about the period of time that we’re in. And I’m guessing there’s still some of this out there, of waving inspection is to your point in a traditional process, you’ve got point one, and then you’ve got a later point, right? So you’ve got a little bit of time to sleep on it. Do some due diligence. Take a breath, you know, look at the inspection report. Make sure you feel good about costs and things that are needed repairs, like when that inspections being waived. That’s bang, bang. Yep, right at that point. So Are you still seeing that out there much?

Nate Hedrick 38:23

Some. Not here in the Cleveland market as much. I haven’t had a wavelength of inspections in ages, personally, but I know it’s still common out there. There’s a question I get all the time, Tim. It’s, it’s Nate is now still a good time to buy a house? And I’ve literally gotten that question my entire career of real estate, which I think is funny, but the only time I say no to that question, quite honestly, is if you’re in a market that is still in that sort of a fervor – where you are waiving inspections, you are waving everything because it doesn’t give you that pause button. Like I think, I think it’s really, really scary to go into a house purchase not knowing all the information and trying to spend hundreds of 1000s of dollars.

Tim Ulbrich 39:03

Especially as a first time.

Nate Hedrick 39:04

Yeah, exactly. Even on things like new builds, where, you know, they’re like, Oh, it’s a new construction. Don’t worry about it. Like, there are just as many problems with new builds as there are with with existing construction. So I you know, it’s, it’s, there’s never a blanket answer for everything. But do hit, be worried, I suppose, if you’re in a market where that’s the norm and then everything’s being waived, then you kind of have to just just hope for the best. I I don’t like those personally.

Tim Ulbrich 39:30

So there you have it, the six steps that first time homebuyers need to be thinking through again if you want to download this information and a guide that you can take notes and reference it later and go to yourfinancialpharmacist.com/homeguide. That’s one word. Nate, talk to us about the Real Estate RPh home buying concierge service that you offer and how pharmacists, no matter where they are in the country, could benefit from from working with you. Tell us about what that service entails and where they can go to find more.

Nate Hedrick 39:57

Yeah, absolutely. So we alluded to this service a little bit earlier. But the idea was that, you know, years ago, when I bought my first house, I wanted to have a great real estate agent on my team, and didn’t really know how to get that person, right. I knew how to ask a couple of friends who they used and whatever. I knew how to Google “good real estate agent in my area”. But, like, that was it right? So we wanted to try to create a service that kind of filled that gap. And so we, we did that. It’s a totally free service available through our website. You can go to realestaterph.com There’s the home buying concierge service right there. It’s a it starts with a 30 minute call with me. It’s totally free. We’re going to chat about things like budget must haves, we’re going to go through loan options, answer any questions you have, and then after that conversation, we’re going to connect you with a really great real estate agent that’s going to be specific to be specific to you guys in the area that you’re looking in. Somebody that we’ve vetted, or that we’ve worked with in the past through like an interview process or that’s actually helped another pharmacist buy a home. And then once you get connected, you get off and running with them. So it’s it’s a nice way to take the guesswork out of it and not have to do any of the legwork of interviewing these agents and trying to find the right one when you’re just trying to make, you know, ends meet and get get through the day sometimes. So that’s why the service exists – its there to really be a helpful thing for pharmacists.

Tim Ulbrich 41:10

So again, realestaterph.com, you get more information. We’ll link to that in the show notes. You can book a call with Nate. Nate, if I’m listening and I’ve got a distant thought of having a buy in the next maybe year, two years versus I’m listening and, you know, I’m ready, ready to go right now. Like, when would you advise people to begin this process and working with you?

Nate Hedrick 41:31

Yeah, great question. So if you’re in that six plus months out range, that’s probably the time to be, you know, focused on budget, focused on all the things we talked about in the kind of the kind of the guide, the first couple steps to get ready for those things. Once you reach that, hey, we would reasonably buy a house six months from now or sooner, that’s probably when it’s time to engage with me all the way up until, hey, we’ve already gone to a couple open houses, Nate, like we’re ready to look at this place. I’ve even had people engage the service knowing the property they wanted to put an offer on. Right? They’re like, hey, Nate, we found the perfect place. Like, can you help? And we can help that quickly. So anything six months and before is probably a good time to connect with me. If you’ve got you know longer, it’s probably time to keep, keep working on that budget, make sure everything’s all your ducks are in a row, and then, and then get closer and engage me at that point.

Tim Ulbrich 42:18

The only asterisk I would add there is know thyself, right? So it’s very easy. I remember this myself, where it’s, Hey, we’re looking in one year, and then you start searching, and it’s like we’re looking tomorrow, right? Just thinking about that timeline, thinking about the budget, and really using that that point in time, as you mentioned, if you’re six months out, to really look at the rest of the financial plan and the pieces to figure out how this is going to fit in to that as well. Nate as always, great stuff. Appreciate your insights. Love the way you teach us up to date information that you’re bringing to our community. Thanks so much for taking time.

Nate Hedrick 42:50

Thanks for having me.

Tim Ulbrich 42:52

Nate and I have covered a ton of information in this podcast. So imagine working with Nate one on one through your home buying journey and having his support to give you much needed peace of mind. We know many pharmacists want to feel confident about big financial decisions, including a home purchase. So if you have fears of being house poor, concerns about the impact a home purchase might have on your other financial goals, Nate and his home buying concierge service can help all at no cost to you. You can visit realestaterph.com, or click on the link in the show notes to schedule your free 30 minute jumpstart planning session with Nate.

Tim Ulbrich 43:32

[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 offered to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyzes expressed herein are solely those of Your Financial Pharmacist, unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward looking statements, which are not intended to be 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.

[END]

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

Posted on August 15, 2024August 14, 2024 by YFP Media

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

Posted on August 8, 2024August 7, 2024 by YFP Media

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.

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YFP 370: Your Retirement Questions Answered with Tim Baker, CFP

Posted on August 1, 2024July 31, 2024 by YFP Media

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

First Horizon’s Pharmacist Home Loan
Die with Zero by Bill Perkins
YFP Retirement Planning Series (Episodes 272-275)
- YFP Episode 272: How Much is Enough? (Retirement Planning)
- YFP Episode 273: Alphabet Soup of Retirement Accounts (Retirement Planning)
- YFP Episode 274: Risk Tolerance vs Capacity (Retirement Planning)
- YFP Episode 275: How to Build a Retirement Paycheck (Retirement Planning)
YFP Episode 305: Understanding Annuities: A Primer for Pharmacists
YFP Free Guide: Retirement Roadblocks: Identifying and Managing 10 Common Risks
The Power of Working Longer (2018, Stanford Institute for Economic Policy Research)
YFP Book a Discovery Call
YFP Disclaimer
Subscribe to the YFP Newsletter
Tim Ulbrich on LinkedIn
YFP on Instagram
YFP Facebook Group
Tim Baker on LinkedIn

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)

Posted on July 25, 2024July 18, 2024 by YFP Media

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?

Posted on July 18, 2024July 17, 2024 by YFP Media

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

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 367: Healing Together: Transforming Your Trauma to Triumph with Dr. Helen Sairany

Posted on July 11, 2024July 10, 2024 by YFP Media

Dr. Helen Sairany discusses the prevalence of burnout and trauma among pharmacists and the importance of addressing the root cause of trauma to lead to a path of healing.

Episode Summary

Discussing the intersections of trauma, resilience, and identity, Helen Sairany, a pharmacist and author, explores the impact of childhood trauma on workplace functioning. Dr. Sairany discusses the prevalence of burnout and trauma among pharmacists and the need to address the root causes to ensure the well-being of the profession.

In this beautiful and powerful conversation, Dr. Sairany emphasizes the importance of recognizing the depth of human experience beyond labels and embracing coexistence, tracing back beliefs to their origins to overcome financial conflicts, and addressing the root causes of trauma to build healthier relationships.

About Today’s Guest

As a 7-year-old Kurdish child in Iraq, a country torn by war and conflict, Helen was spotted by a U.S. Marine deployed to her country with a grenade in her hand, who saved her life by exchanging the grenade for a bag of candy. He later escorted her family and her out of war to seek refuge in the U.S.

Because of her turbulent childhood, she was diagnosed with complex PTSD in 2013. Thus, she aspire to live in a world where the vast majority are trauma-informed, feel psychologically safe and valued for the work they put out, and return home fulfilled.

Since the outbreak of the COVID-19 pandemic began, Helen have been open about her dormant childhood trauma. She have been traveling worldwide to give talks on topics such as trauma-informed care, leadership, and the workforce.

After having traveled to more than 100 countries worldwide, she developed an appreciation for the diverse mix of cultures, people, and traditions.

Her interest in trauma stems from personal experiences of living through wars, navigating complex relationships, and continually learning what it means to be human.

Key Points from the Episode

Healing trauma and its intersection with finances with pharmacist and author Dr. Helen Sairany. [0:00]
Trauma, immigration, and healing with a focus on personal experiences and emotional reactions. [2:38]
Pharmacist burnout and trauma due to workplace stress and lack of fulfillment. [8:21]
Pharmacist burnout, trauma, and advocacy for trauma-informed care. [14:18]
Trauma, inner child, and resilience with personal experiences and examples. [17:35]
Identity, belonging, and career development for a pharmacist. [21:17]
Labels, identity, and human experience. [26:03]
Pharmacist boundaries, reimbursement, and provider status, with mentions of trauma and psychology of money. [30:38]
Healing from childhood trauma and its impact on financial decisions. [34:33]
Inner work, meditation, and trauma healing in the workplace. [40:57]

Episode Highlights

“I like to define trauma as an event that is too much, that is too fast, and that is too soon for your brain to comprehend. It gets stored in the body. And that’s why when you come across a trigger that is reminiscent of your past, it’s usually the gut that tells you something is not okay, because the gut is connected to the brainstem” – Dr. Helen Sairany [6:38]

“I’ve just been giving the same talk about what pharmacists in institutions are going through is equivalent to combat trauma. So if that is the case, if we are coming out of our workplace with combat-like trauma, does that mean our workplace is a combat zone?” – Dr. Helen Sairany [11:43]

“Every seven years, it’s a new you. Every seven years, every cell of your body goes through a complete rebirth.” – Dr. Helen Sairany [25:17]

“Labels separate us. And labels confuse us. And labels get us in trouble. Because the second you mess up and label, what do people do? They associate it with XYZ and they cancel you. So it is a concerning era in this country because of this whole concept of labels. And that’s probably why I have issues with labels. Because after all, why do I travel all around the world? Because I feel like we all have so much in common, and labels just never help with coexistence.” – Dr. Helen Sairany [30:09]

“The biggest boundary is that [pharmacist’s] have allowed our service to go by unrecognized. And this is not about provider status. You know, you ask a nurse, you ask a physician, they will tell you pharmacists are a provider. This is about a change in the regulatory language. This is about payment parity.” – Dr. Helen Sairany [31:57]

Links Mentioned in Today’s Episode

Website – https://helensairany.com/
Certificate Training Program – https://helensairany.com/certificate-training/
Trading Grenades for Candy by Dr. Helen Sairany
The We You Don’t See by Dr. Helen Sairany
The Myth of Normal by Gabor Mate
Register for July 24th 12-1pm YFP/APhA Webinar: Retirement Income Planning: How Much is Enough and How to Pay Yourself In Retirement (With Live Nest Egg Calculation)
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Tim Ulbrich on LinkedIn
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YFP Facebook Group

Episode Transcript

Tim Ulbrich 00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week I welcome pharmacist and two-time author Dr. Helen Sairany, to talk about how we can all heal together by transforming our trauma to triumph. During the interview we discussed how her personal experience with complex PTSD and trauma has influenced her advocacy work and trauma informed care how her travels to over 100 countries is influenced her understanding of human resilience. Her career transitions from working in Iraq as a new grad to association management to leading two state pharmacy associations and now running her own business, as well as the intersection of psychology and money and how our past traumas and belief systems play out in our spending behaviors.

Tim Ulbrich 00:47

Before we jump into today’s episode, I invite you to learn more and register for our next YFP webinar, Retirement Income Planning: How Much is Enough and How to Pay Yourself in Retirement. Saving for retirement and ensuring there’s enough to retire comfortably is a good starting point. But it’s important to then consider how a monthly paycheck will be generated during retirement to replace your pharmacist income. During this free YFP webinar, co-founder and Director of Financial Planning, Tim Baker will walk through strategies to build a retirement paycheck, including doing a live nest egg calculation, discussing savings vehicle strategies for withdrawal tax integrations, and how to consider and evaluate Social Security benefits. Make sure to attend live for a chance to win an amazon gift card. If you can’t make it live. No problem, make sure to register and we’ll send you a copy of the replay afterwards. You can learn more and register at yourfinancia pharmacist.com/retirement. Again, that’s yourfinancialpharmacist.com/retirement. Alright, let’s jump into my interview with Dr. Helen Sairany.

Tim Ulbrich 01:48

Hello, and welcome to the show.

Dr. Helen Sairany 01:50

Thank you so much for having me, Tim. I’m looking forward to having a discussion with you today.

Tim Ulbrich 01:54

Me too. This has been awhile in the making. You and I have known each other for a while now at least a decade, I think. We crossed paths when you at the time you were working with American Pharmacists Association, we’ll talk more about your career journey as we get into the recording. And more recently, I feel like we’ve connected on our own healing journeys and some of the work that we’ve been doing individually. I have a ton of respect for the work that you have done, we’ll talk about the books that you’ve written on this important topic of trauma. And I think for our listeners, there’ll be a real treat and perhaps a different angle and topic than there used to as we dig into the finances normally, so thank you so much for taking time to join.

Dr. Helen Sairany 02:36

Thank you for having me.

Tim Ulbrich 02:37

I want to start with your first book, Trading Grenades for Candy, one that I enjoyed. I remember reading it on vacation, I was at the Fingerlakes with my family, I couldn’t put it down. True story. I already told Helen that; I’m not making it up for the show. And in that book, you share how as a seven year old Kurdish child in Iraq, you responded by a US Marine with a grenade in your hand who saved your life by exchanging the grenade for a bag of candy. And I want to start there if you could tell us more about this early experience and how growing up in a violent background, in a war torn country led to your own trauma, which would eventually become the basis for helping others along in their own journey.

Dr. Helen Sairany 03:17

Yeah, so. And truth to be told, I don’t have a recollection of that story. Because my trauma was so big, and that I don’t remember. So my parents actually when I wrote my memoir, my parents told me how excited I was to rush home with that bag of candy. And I narrated the story to them then when I was seven, but I just don’t remember that it happened. But the book, it’s the title is Trading Grenades for Candy, but it’s more of a metaphor, how I gave up my life in an austere environment for the American dream and I and I’m sure you’ve kind of picked on this as I was narrating my story, how I was trying as a you know, younger woman, single, you know, professional with all these degrees trying to go back to the Middle East after all these years of living in the States and how I was resented because I was one of the very few lucky ones who had the opportunity to leave the Middle East while everybody else was stuck in the war zone. So Trading Grenades for candy is trading my life for the American dream more. But it did start with that exchange between me and the marine. And yes, it did lead to my service and helping frontline heroes. Is it the Marines? Is it the pharmacists? Is it doctors? I feel like we all have a bit of trauma of some sort. But the book if you look at the acknowledgement the book is dedicated to the unknown marine that saved my life. And I’m hoping that through this book, I’ll be able to find him one of these days. But it is it is a true story. It revolves around my life around immigration settlement, displacement discrimination and how I was resented at the end after returning to my roots.

Tim Ulbrich 05:03

Since we’re going to talk a lot about trauma, if you could define that for us, you know, I recently read per your recommendation, Dr. Gabor Mate’s book The Myth of Normal, fantastic read, we’ll link to that in the show notes. I think half my reading list by the way, right now I have a stack of books in my office, I think those are recommendations from from you. So that one, he talks in that book about little T trauma, big T trauma. And just the way he taught that, and really, I think helped me normalize in my own healing journey, what that word even means, and perhaps the misconceptions I had around trauma is important. But since we’re gonna talk so much about that, let’s define that for a moment. How do you define trauma?

Dr. Helen Sairany 05:43

So I don’t like to, I don’t like the whole concept of big T, little t, because, and because the human, the depth of human experience cannot be limited to a letter, okay? Your little T might be a big T, for me, my big T might be a little T, while the society try to impose this whole concept of we’re all created equal. But let’s face it, some of us are more equal than others. And by that, I mean some of us are more resilient than others. And if you look at the study that was done by JAMA, looking at the veterans who get deployed to combat, those 20% of veterans who come back to get clinically diagnosed with PTSD are the ones with pre existing traumatic childhood experiences. So that is probably why I have a little bit of a concern with the big T and the little T category for trauma. So what I like to define trauma as as it’s an event that is too much, that is too fast, and that is too soon for your brain to comprehend. And that’s why trauma is never about the brain challenges, while the mental health community likes to focus on mental health being as a separate brain being a separate compartment than the body. Trauma, because it’s too much too fast, too soon, it gets stored in the body, it gets stored in the body. And that’s why when when you come across a trigger that is reminiscent of your past, it’s usually the gut, that tells you something is not okay, because the gut is connected to the brainstem. And brainstem, or the reptilian brain is responsible for your survival. So again, traumas it’s about something that happened inside of you because of what happened to you. But it’s also about a disease that being stored in your body as a response to an event that was too much, too fast, too soon.

Tim Ulbrich 07:31

One of the indicators I have found in my own journey is when I find myself having a disproportionate, not sure if this is a technical term, but a disproportionate emotional reaction to a situation where I can step back and look at it and say, Oh, wow, that was interesting. Like, this happened and I got really angry, right, or I became really sad, or I was really fearful or feelings of shame, or guilt, or whatever is the emotion. And when I see that, wow, that event doesn’t really correspond to the level of feeling that I was having. Just being aware of that I start to get curious about like, Oh, that’s interesting. What’s what’s going on there? Like, what is the trigger? You know, what’s the event? And I think for me, and I’d love for you to speak about this in your own journey with others. Just that openness to curiosity, without judgment feels to be a really important first step.

Dr. Helen Sairany 08:21

I wished him and I’m so glad you brought this up. I wish as a profession, as in the whole healthcare healthcare field as a whole would take that curiousity approach, because it is no coincidence that one out of every two American is reporting either anxiety or depression. It is no coincidence that 60% of Americans are reporting at least one chronic disease. So now you can you can blame genetics all you want. But that is a hard case for me to roll with because genetics cannot alter at such a fast pace. So the typical North American provider reaction is well, what are we going to do? Well as a health care provider if the same patient and that’s what led to the whole famous Adverse Childhood Experiences Study by Drs. Anda and Felitti. They kept seeing patient with morbid obesity, one patient after the other and the same different patient would report the same exact adversity from childhood and that is what led to the birth of adverse childhood experiences study that perhaps obesity is not about the food, but it’s more a reaction and reaction to early adversity from childhood. So that’s the curiousity that I you and I are talking about. Let’s take a step back and figure out the how did we get here? Because the profession is not okay. Healthcare is not okay. I mean, I don’t like to focus just on pharmacists. I was recently on a sabbatical and I ran across a half a dozen nurses from the US and some of them were saying that they wake up to the beats of the sound of the IV unit from the ICU, and that is an iconic symptom of PTSD. So that curiosity, I think it’s overdue. And I think because of the scary statistics, I don’t think we are in a situation where we can have a reactionary response anymore. I think we have no choice but to take a step back and figure out how did we get here? What is an issue in the system that is causing so much disease and so much dysfunction among all of us?

Tim Ulbrich 10:21

And I’m curious as you speak to groups all across the country groups of pharmacists, groups of other other health care professionals, but for our audience, as we think of pharmacists that are listening, I’m not sure they would associate, you know, the word trauma with their experience in the healthcare system or their role. What ype of responses are you getting from pharmacists, what types of thoughts or feelings or reactions are coming up? And where’s that stemming from?

Dr. Helen Sairany 10:48

So I wrote an article for Pharmacy Times 2021, three years ago and I talked about we were still like in Omicron era. And I talked about how, what what pharmacists are going through is equivalent to what a combat veteran would go through. Okay, so pharmacists are experienced combat like trauma, excuse me, and the article just went viral. I wasn’t expecting for anybody to kind of associate combat trauma to burnout. I just randomly wrote the articles, you know, me, I’m passionate about trauma. And the article went viral. And so many pharmacists wrote me and they said, This is what I was feeling this whole time. But I just didn’t know how to categorize it. Do you know what I mean? And they thanked me for it. And as you’re aware, I’ve gone to 26, 27 states and I gave one keynote, and my keynote went viral. And I just been giving the same talk about how what institutions, or what pharmacists in institutions are going through is equivalent to combat trauma. So if that is the case, if that is the case, if we are coming out of our workplace with combat-like trauma, does that mean our workplace is a combat zone? And that is a question that I addressed the audience because individuals who go to combat veterans who go to combat they come back with PTSD. But if we are ending up with combat like trauma from our workplace, that means our workplace is not healthy, if that makes sense.

Tim Ulbrich 12:19

Yeah. And when you talked about the example of nurses you interacted with when you were on sabbatical and that one example of, you know, hearing the the beat of the IV, like what are their similar examples and trends or similarities you’re hearing among pharmacists? And Is it in community practice? Is it in hospital practice? Is it across the board, but what what are some of those experiences that pharmacists are having as a result of this traumatic workforce is traumatic experience.

Dr. Helen Sairany 12:49

And I know you and I kind of talked about this, in our earlier conversations, it’s, I like, as much as I hate to, and I’m not trying to belittle workplaces. But I think the number one concern for pharmacists is the lack of fulfillment. The lack of fulfillment, I can only talk on my behalf. I went through pharmacy school, I got a doctoral degree. And for four years I’ve been I was told I’m a provider, I’m a provider. And I was taking all these amazing therapeutic courses, and I was so excited. And then as soon as I was out of pharmacy school, I got hit. And I was not a provider. And now we have a provider status bill, that I cannot get reimbursed for my services. And I cannot use 90% of the clinical therapeutics that I was, you know, I was taught. So now what do I deal with? And I’m not saying that I was misled, and I’m not going to say that I was lied to. But it is it is a shock. Going back to too much, too fast, too soon. Too much you are actually put. And that is what the examples I hear from pharmacists, they feel like after pharmacy school, they’re being put in a heavy traffic during rush hour. And they’re told to guide the traffic with no prior experience. Now, that is not traumatic. I don’t know what it is. It is too much. And they’re trying to kind of figure out and then the clock is ticking with the workload. So I would say this is the example that I’ve been hearing the lack of fulfillment and also the they’re not doing something that they were told they were.

Tim Ulbrich 14:17

I think that lack of fulfillment and the misaligned expectations. You know, I think for those that have been working for a period of time and have experienced any of that, there’s a there’s a mental exhaustion. We talked about burnout, we use different words for this. But over a long enough period of time, I think we can really underestimate the impact that it can have. And certainly, I think the human can be very resilient to short term stress, and that’s to be expected on some level regardless of workplace. But what I hear from pharmacists, is that misaligned expectations, yes, that lack of ability to do the work that they thought they were going to do to have the impact that they thought they were going to have obviously we talked about the financial will impact and, you know, feeling like they’re tied to that setting whether it’s a good fit or not because of their debt, because of other things. But you layer that on in the example, given of the feeling of like, you’re in the middle of rush hour traffic, and you’re expected to guide this traffic over a 12 hour shift, and another 12 hour shift and another 12 hour shift over many, many years. I mean, you can start to appreciate the level of impact that would be there. Helen, you have been open and sharing your own journey with complex PTSD that you were diagnosed with in 2013. And I’m curious to hear how that personal experience with trauma has influenced your advocacy and your work towards trauma informed care.

Dr. Helen Sairany 15:43

I’ve had PTSD all my life, but I just didn’t know that it was PTSD. Just like how pharmacists were telling me in that article, like they knew was trauma, then it was too much, too fast, too soon, but they didn’t know how to kind of point fingers at it. So it wasn’t until I was back from overseas and the unfortunate encounter, because I was treating little girls with PTSD when I was part of Doctors Without Borders. And that is when my inner child started going out of control. And I would wake up sweating with nightmares. And so that’s when I realized that something was not okay. So I was diagnosed, but unfortunately, the diagnosis and the way it’s been handled, and I’ve been very critical about it. It’s, it’s, it turns into a victim to a label, if that makes sense. And I was I carried a lot of stigma, I carried a lot of shame, a lot of shame back in 2013. And I didn’t go public about my, my symptoms until COVID-19. And COVID-19, as much as I hate what happened, it was more of a like awakening for me that I need to because I wasn’t able to travel, you know, I’m a world traveler. So my travel got canceled, and we were all stuck at home. So that is when I realized that I could do something good about this. So I wrote my first book, Trading Grenades for Candy. Trading Grenades for Candy is what led people to ask for more because I don’t deep dive into the mental health aspect of my traumatic past. So I would say it was my memoir that led me to do all this great work. And as I started deep diving into trauma, Tim, I realized that it’s very relevant for what the healthcare is going through. It’s too much, it’s too fast, too soon. And I And I’m, I’m quick, like I started relating to what physicians are going through, what pharmacists are going through, what nurses are going through. It’s it’s not limited to war.

Tim Ulbrich 17:35

And I think just that reframe, you know, the, the acceptance of that, and understanding the definition of trauma. And I know, we talked about whether little T and big T is appropriate, but I Speaking for myself, you know, often when I think back to my childhood, and and just the admiration, respect and love that I have for my parents and the experiences, you know, I kind of put a wall up to like, well, there was no trauma, I didn’t experience any of the big T. Right, the things that I think about I have the understanding by, but and so I think that that can sometimes cloud our understanding awareness of you know, if we can humble ourselves for a minute, even as I think about raising my own four boys, like they have experienced trauma, like in my household that has happened, not big T trauma, but there is, you know, traumatic experience that happened in any household that are going to have an impact on them as they think about long term.

Dr. Helen Sairany 18:25

Exactly.

Tim Ulbrich 18:26

You said inner child, I think that’s a term that I know has been important to me in my own journey, as I’ve worked with a men’s group and gone through some counseling as well. Can you define that for those that aren’t familiar with that term?

Dr. Helen Sairany 18:40

Inner child is basically it’s the child that that gets suspended inside of you. And, for example, my mother was emotionally distance. So I didn’t grow up with Barbies, and toys and like a typical American child, right. Not because they didn’t want me to because we were in a war zone, right? When you’re about to be bombed, you know, like survival is the number one priority, but that child has healthy narcissistic needs. So we’re not talking about the narcissism such as the narcissistic boss or the ex. We’re talking about a child feeling like needing the unconditional love being inconvenient, regardless of how sleepy or how tired you are, they want to play, they want that attention. That is the healthy narcissistic need. But if you are distracted, or if you’re burnt out, or if you’re stressed, you’re not going to be able to give that child what the child needs. So what happens the child is gonna have a tough decision to make, am I gonna force my authenticity, my need from my parents for the attachment or am I gonna split from my authentic need? Chances are because they put you on a pedestal because my parents are never wrong. They are going to start what’s called splitting. They’re going to suspend that inner child need, the healthy narcissistic need, but whatever is not met, it gets suspended, which means they take their unmet needs to their adult life and their unmet needs becomes the boss’s need, it becomes the partner’s need, it becomes whatever. So kudos to those who kind of know that term, who know where this inner child need comes from, but a lot of people, and let’s they let their inner child bleed all over them, and they’re not aware of it.

Tim Ulbrich 20:17

That’s a beautiful, succinct explanation. Thank you, I have a guy in my men’s group, Greg, who does a lot of this area of work and talks a lot about the inner child. And he does a beautiful job of naming little Greg, and the work that he has to do to spend time with little Greg and nurture little Greg and, you know, reinvigorate some of those experiences and things that were missing. And it’s just beautiful to watch, kind of that journey and understanding of the inner child, and the impact that I can have. You mentioned travel a couple times on the podcast, you’ve traveled over 100 countries, which is incredible. I feel like every time I see what you’re up to on LinkedIn, you’re in a new country, doing new and different things. How have these experiences, enriched your experience of human resilience, and even the work that you’re doing around trauma informed care?

Dr. Helen Sairany 21:10

You know, it’s, it’s, it shows how we humans have so much in common, my goodness, so much in common. And I grew up, and I know you’ve read my memoir, and I grew up struggling with belonging. I was always a refugee girl in the states who spoke with an accent with thick brows, curly hair, she’s different, right? And then, and I knew I knew it was different. I knew I didn’t belong in the States. I knew I was a foreigner. But the reality hits was when I decided to go back and serve with Doctors Without Borders. And when I got the resentment from my own people, they’re like, well, you’re the American wannabe. So I felt like I was the foreigner in the States. And now I was the American wannabe in my own mother country. So it became very difficult. And I was going through an identity crisis in my late 20s. And only then, my therapist was like, well says, Who that you have to decide between either or you’re just a world citizen, right? So I will say, my lack of belonging, whenever I feel that pain, that I don’t belong anywhere, I feel like I belong everywhere. And I’m not trying to be my angel here. But it really is true. Because this lack of fulfillment, it just made me want to belong everywhere. And I just love every time I am stressed, or I’m depressed, or I’m having difficulties, I, I just go implant somewhere and I come back completely refreshed.

Tim Ulbrich 22:30

You know, when I think of your career journey, Helen, it’s an interesting non traditional out of my mature, that’s the best term. You’ve talked about your experience shortly after graduating Doctors Without Borders. You spent several years with American Pharmacists Association, doing some incredible work there where our paths crossed. You then would go on to lead a couple of state pharmacy associations. Now you’re doing the work that we’re talking to me here on this episode, and, and you know, dabbling into the world of entrepreneurship, and all the exciting things that are there. One of the things I see pharmacists really struggle with is the attachment to their identity as their role of being a pharmacist. And when different opportunities might open up that are, quote, non traditional. I remember feeling this when I came out of residency, and I quickly exited practice and was exploring different things that I could do, I had this little voice in the back of my head that was like, Well, Tim, didn’t you train for eight years, and take on all this debt and go through residency, like you’re a clinic, you should be a clinician, and I remember thinking like, I don’t really like clinical practice, like, it’s just not for me, and it took some time to really accept that, and really see where I can have an impact and aligned with my skills in other areas. And so my question for you is, you think about your journey, your identity, as a pharmacist, your role as a pharmacist? How have you worked through that? Has that been a challenge as you’ve gone through this own journey, and you’re now doing work, obviously, in trauma and helping other healthcare professionals?

Dr. Helen Sairany 24:02

So I knew I knew when I was a student intern, that I was more than what was allowed of me. And the disappointment started early on. And that I believe, that’s probably why I packed my stuff and I joined Doctors Without Borders. So the whole, you know, we talked about the whole concept. Well, I felt like maybe I was misled. Or maybe I was not being told, I think that I’ve really quickly enough not been in growing up in a traumatic environment, I tend to be a bit quicker than an average person. Because of the risk I was surrounded by, I had no choice but to be quick in connecting dots. So I would say I am I’m a bit faster than an average individual because of my unfortunate circumstances. So I was quick in picking up that if I take this path, I know Helen is not going to thrive. So so that’s probably why I decided to take you know, this non-traditional pathway. But I would never, ever associate my identity with my profession. And I know that’s not your typical response you hear. But I would like to emphasize one thing, Tim, and that is something I will say 99% of pharmacists don’t know. And it just came up yesterday, as I was talking to a mentor of mine. Every seven years, it’s a new you. Every seven years, every cell of your body goes through a completely rebirth. So that’s exactly what happened to me with APHA after seven years. That is when it hits because I felt like I was going up, up, up, and I was doing all these amazing things. And then I reached the status quo. And I talked to a lot of people, it’s usually the seventh year that hits them, because the body goes through a complete reform. So it’s not about feeling guilty. It’s not about abandoning the profession. This is how we’re built as a human, if that makes sense. Some people are more open to it, while other people because of the societal conditioning, the professional conditioning, they decide to just stay where they are just because this is something they feel like that they signed up for.

Tim Ulbrich 26:03

Yeah, that’s the piece I see a lot, Helen, what you just mentioned there, you know, the openness to it, or lack there of you know, I see this on the financial side, where there’s, you know, a very real sunk cost concept where I put x amount into our my, maybe my family helped, my parents help whoever into paying for this college degree. You know, I remember when I graduated 2008, the story was very strong saidand unsaid of like, you will be a doctor, you will practice at the top of your license, right, all the things that you shared early on. And I think there’s a real risk of the enmeshment that can happen between your individual identity, which is independent of your role as a pharmacist. But very quickly, I think when we when we take ourselves back to 18, 19, 20 year old Tim going through pharmacy school, like those things start to become enmeshed. But if we’re not careful, I think some of that may or may not separate back out and, and what I what I’ve run into is people that I can sense have the intuition, whether it’s seven years, eight years, 10 years, five years, whatever, but aren’t willing to pivot move or be open to what else may be out there within or outside of the profession for a variety of different reasons.

Dr. Helen Sairany 27:15

No I hear you, and that is the whole concept of the codependent society, which is something I’m sure you came across in my second book is enmeshment, right? Like I am, I will feel good if XYZ feels good about me. And it’s if you look at our academic system, and I know you’ve written about this as well, they turn our identity to a letter. And if the letter is F, I feel like a failure. If the letter is A I feel, but and I know the whole concept of Maria Montessori, she challenges the whole Western academic system, because it’s all about play. And this whole concept of ADHD which we can go on and on. And Dr. Gabor actually challenges is the child fighting ADHD or is the child fighting this dry, you know, classroom setting, because kids are meant to play. They’re meant to be be playful. And that’s what Dr. Maria Montessori focuses on. But you’re expecting the child to sit on their butt like this for eight hours, of course, they’re going to be diagnosed with ADHD. So it just it’s time for us to revisit some of these concepts and some of these associations, you know, but until then, people are going to continue associating themselves with these labels.

Tim Ulbrich 28:28

Yeah. And I think the labels, you know, as a parent of four young boys, right, that’s a concern that I have is, you know, how do those labels get imprinted early? Where did those stories come from? And, you know, my wife and I have been talking a lot recently, and one of our boys in particular, where we caught ourselves recently, yeah, recognizing that, hey, we’ve kind of told ourselves and each other a story about why he essentially did something. And he was trying out for a sport. And it was something we both looked at, we’re like, oh, we’re surprised, like he’s self initiated. And we’re glad we kind of gave him the space to do it. But we caught ourselves in the moment of like, wait a minute, like, why are we both saying we’re surprised by this, and then that led to a conversation of, hey, we’ve kind of both told ourselves the story of who he is and what he should be doing. While he’s very clearly trying to tell us, like, that’s not his story, you know, that’s not what he thinks. And so it’s just, it’s really interesting to watch and observe that and even to see my boys in their, their creative habitat environment is, you know, to be outside, to figure it out, to be creative, you know, to work through the messiness, and I think so much to be learned there, which we can’t necessarily measure and say that’s an A, B, or C.

Dr. Helen Sairany 29:36

To add to that, to add to that, and that’s probably why I’ve been a little critical, I can say this because I’m a member of minority okay, so this has nothing to do with Tim, for disclosure. I’ve been little critical of the DEI because it just, I’m gonna keep emphasizing, is it trauma is a diversity is it equity, is it inclusion, whatever it is, it’s about the depth of human experience. The second you associated with label big T, little T, micro-aggression, macro-aggression, like all these labels going around. That’s when you confuse me. You confuse me. And labels separate us. And labels confuse us. And labels get us in trouble. Because the second you mess up and label what do people do they associate it with XYZ and they cancel you. So it is a concerning era in this country because of this whole concept of labels. And that’s probably why I have issues with labels, you know? Because after all, why do I travel all around the world? Because I feel like we all have so much in common, and labels just never help, if that makes sense with coexistence.

Tim Ulbrich 30:37

Beautiful. That’s great. I want to talk for a moment about a topic we could do a whole separate episode on, which is boundaries and setting boundaries, something that I don’t think we as pharmacists are inherently comfortable with. I recognize I’m generalizing that when I say that I remember reading Dr. Henry clouds book on boundaries several years ago, it was just very eye opening of Whoa, like, I’m not very good at setting boundaries. And, you know, that could be boundaries with ourselves that could be boundaries your loved ones, boundaries with the co workers. But what are you seeing in terms of pharmacists lack thereof of boundaries? And why setting boundaries is so important?

Dr. Helen Sairany 31:15

I mean, I think so that’s something you could relate to Tim more than I do, it’s asking for reimbursement is the biggest, it’s the biggest boundary. Find me a provider, that’s going to do MTM for 40 minutes for free. I mean, that is that that has been our biggest, you know, I don’t want to call it an enemy, but it’s backlashing. It’s backlashing. And the expectation is, and I know you and I kind of talked about this expectation as well, if I don’t get reimbursed for my services, when a colleague of mine who has a specialty, a consulting service, that becomes an expectation that I shouldn’t pay, either. It’s more of like re-enacting or trauma, if that makes sense. So I would say the biggest boundary is basically we’ve allowed our service to go by and recognized. And this is not about provider status. You know, you ask a nurse, you ask a physician, they will tell you pharmacists are provider. This is about a change in the regulatory language. This is about payment parity. So I’d like to, you know, and I’ve challenged APHA, I’ve challenged Tom Milligan, myself, you know, provider status has put a lot of insecurity in all of us, because we all thought we were providers, and now there is a bill. So put insecurity in in us all, and there’s so no payment parodies, it’s the payment parody that we need. So going back to the whole boundary concept, I would say that’s the biggest in the profession, at least.

Tim Ulbrich 31:17

Yeah. And it goes back to unrecognized value goes back to that feeling like I was trained to do something more and have a bigger contribution, but I have limits. And I remember, you know, I graduate in 2008. And you know, when you think about what was supposed to be big news with 2006, Medicare Part D MTM? I remember the rollout of Medicaid, MTM inOhio 2009-2010. Huge, huge opportunity. I remember the early pushes for provider status. I know some that are listening are said Yeah, we talked about this back with pharmaceutical care, and I get it. But I feel like the closest we probably were and even then it felt like we’re dancing around. Like, are we tactically doing this the right way? And are we asking for too much? And, you know, do we need another pilot study to validate this? Yada yada yada? So it’s a really interesting take on on boundaries and even some trauma related to that within our own profession? And the cumulative head trash that has probably come from you know, you’re absolutely right. When we insert this language of, we need to achieve provider status, despite others already other health care professionals thinking of us in that way. It almost sets the expectation back on ourselves of oh, well, I’m not a provider yet. I need to advocate for that and fight for that. Yeah,

Dr. Helen Sairany 32:37

I mean, I have so many physician friends are like what are you talking about? You are a provider. Like try like Helen, you’re okay, you’re okay.

Tim Ulbrich 34:00

You’re like, but we don’t get paid! I want to shift gears and talk about the psychology of money, I think related to the conversation, certainly one of interest from our audience you shared with me a couple weeks ago, I think you’re taking a course and some training through some some business coaching classes that you’re doing, but I do relate to the psychology of money, how fascinating it is for how our past traumas and belief systems play out in our spending habits in our financial behaviors. Tell us more about what you’re learning there.

Dr. Helen Sairany 34:34

Time and time again I hear money is the number one stressor for couples, in-laws are the number one stressors for couples. Communication is the number one stressor for couples and the number three reasons for successful relationships. We’re all bad, right? It’s all symptoms. All that you hear is symptoms of childhood baggage. What baggage what belief system do you bring into the relationship? Okay, now for someone like me, I grew up grew up in an environment that was defined by scarcity, defined by scarcity and my, my family when I visit them, I’ve gotten out and about explored the world, I’ve kind of invested in myself. So I feel like I’ve kind of opened up a bit. But when I go back, I still see the scarcity, that money’s gonna run out that, you know, resources are gonna run out. And because that’s how we grew up, we grew up in an economic sanction. You know, we grew up in an economic sanction and what is not being addressed, just like the inner child, it, you bring it to your adult relationships, adult life. And it’s not the money that triggers conflict, it’s more that money is being as a symptom. It’s a symptom of a belief that you’ve inherited from them from the environment that your family exposed you to, they expose you to. So my thing my take is that, whatever it is, it’s time for you to reflect going back to the curiosity that you started the podcast with, what is making you feel that you don’t want to spend XYZ? And it’s always catching the triggers? Like what is the trigger coming from? Why are you feeling the way you’re feeling? And I feel like that has helped me because I journaled a lot and I write down and I tried to trace it back to the scarcity environment that I was exposed to. So money is a belief system. But the belief system, it’s rooted back to your childhood upbringing, I would say.

Tim Ulbrich 36:26

And this is a huge gap in the financial planning process. And a shout out to our team that I think really does a nice job of trying to dig a little bit deeper here, because any financial decision we’re we’re making, right, the X’s and O’s when it comes to investing, or debt management or whatever. All of those are important. But underneath it, there lies this story, a narrative of how we view money in our beliefs around some of the money. Psychologists call this the money scripts or the money classrooms that we grew up in. And you see this a lot with partners or spouses, where back to my earlier example of a disproportionate emotional reaction. Like, if you find yourself in that, and are able to get curious and reflect back of like, wow, my partner, my spouse just made a $10 purchase, $30, it doesn’t matter what the number was. And it really felt much, much bigger or evoked feelings of scarcity or anger, like what’s behind that. And the more curious you can get individually, and then collectively together, of course, for those that are in a relationship doing this together, you know, I think the more fruit you’re gonna see in the outcome of that, but it’s hard because if we’re if we’re not doing the work to really surface some of those things, we’re going to constantly butt up against those challenges. Often. I always say take yourself back to the kitchen table growing up like what what were those comments? Or lack thereof, potentially, as well.

Dr. Helen Sairany 37:47

And that is something that Dr. Gabor Mati talks about, like, yes, your partner spent $10 In my trigger you, but you carry the ammunition? Yes. Did the trigger warranted that ammunition that big bombs, right, and where is that coming from?

Tim Ulbrich 38:03

Yes.

Dr. Helen Sairany 38:03

Do you know what I mean? So it’s a fascinating concept he talks about in his book, but I will say everything is rooted to childhood believe in the scarcity that we all bring into any relationship. Is it work? Is it marriage? Is it whatever it is.

Tim Ulbrich 38:16

Yeah. For those that have kids under the house, there’s the double challenge of doing the work looking back to understand where your own beliefs come from. And then there’s their work realizing that you have a whole another generation, they’re developing money scripts, you know, based on, you know, whatever they’re experiencing as well. I want to talk about Helen for a minute, if you’re willing to share, what has your own healing journey looked like in terms of therapists that have been involved support groups, the inner work that you’re doing, the daily habits that you have employed that you have found to be most helpful?

Dr. Helen Sairany 38:49

So say, Helen is work in progress. Because there is no such thing as a healing for trauma. Trauma, PTSD was not added to DSM5 and I’m sure you know, this term T. PTSD was the very first promise to treating trauma and it wasn’t added to DSM5 until the 80s. So we still don’t know enough like, you know, my definition of trauma is going to disagree with Dr. Gabor Mate. Dr. Gabor Mate is going to disagree with Bessel Vander Kolk. Because we don’t know enough. We don’t know enough. Like we kind of understand how trauma works. We know there’s triggers involved. We know the inner child, we know the dysfunctionality. But I would say there is not a universal definition around the trauma. So going back to Helen, I would say I am definitely work in progress. There are days where I am good. And there are days where I am not so good. It all depends on the triggers that Helen comes across and what ammunition do I have, you know, that I carry within. There are days where the ammunition just gets out and people are like, whoa, whoa, whoa, your reaction was not warranted. And there are days where like Helen, just yes. So I would say I start off my day with no, it’s non negotiable. I started my day with meditation. Because the meditation, it doesn’t matter if you’re on a vacation, it doesn’t matter if you’re hanging out on a beach resort in Fiji, whatever your meditation, it carries on, it regulates your body’s alarm system, right. So I would highly recommend meditation for everybody first thing in the morning, because you are in an alpha state. Because if you do it middle of the day, it’s going to take 20 minutes for you to calm your brain because the waves kind of pick up right. But when you first wake up in the morning, the waves are like slowly picking up. And that is a golden opportunity for you to regulate that body’s alarm system. And as you’re aware, I’m a runner, so I run end of the day at sunsets, and I tried to read writing has been my go to. So I’m really glad I have a hobby that is been beneficial to people, but it’s equally healing for myself.

Tim Ulbrich 40:57

So I hear writing in there reading, exercising, meditation, and it sounds like you’ve got a daily rhythm.

Dr. Helen Sairany 41:03

And of course, I’m not telling advocating anybody to be vegetarian or plant based, but I’ve invested a lot in my diet. So fitness is a priority for me for sure.

Tim Ulbrich 41:16

Yeah, what I have found in in my own I’ve shared with you before, I think like the morning is sacred protected time. Partly, I think with the boys, you know, once eight o’clock hits, and the day is kind of off and running and by nature a morning person, but having the rhythms of walking and meditation and some breath work and some writing and reading really helps me set the definition for a day and I have struggled with meditation, I have found some breathwork to be more impactful. But but with both of those, I have found that even when I’m distracted in the moment, and I may not necessarily look at that 5, 10 or 15 minutes and say, Hey, I really feel like I got a lot of in that moment. It’s the trickle effect that happens throughout the day, where I find myself just getting more curious and asking questions or being aware of some of the emotional triggers or reactions that are coming up throughout the day, that I think that work really does help contribute to, you know, as the day the day goes on.

Dr. Helen Sairany 42:16

And just if I may one thing, Tim meditation can be very triggering for some people. Because it brings up a lot of thoughts, right? There are days where I’m just like, I’m just like a hot mess because of meditation. But again, that is called the grief work that you’ve never taken a chance. Our society celebrates instant gratification. Well, if this relationship did not work, the only way you can get over him is to find someone else, you know, but no, the only way to get over it is to do the grief work, you know. So meditation is it could be triggering for a pain work that you did not take a chance to grieve fit, if that makes sense. So I just want to kind of bring that up, because there are times where I’ve haven’t allowed myself to grieve a pain in my life and it surfaces during meditation because it’s you and yourself. And the most difficult relationship you could have is the one with yourself not with a significant other.

Tim Ulbrich 43:12

Which is I think really also speaks to the role of a therapist and making sure you’re you’re working with someone you know that’s qualified to help you work through that grief as well. Let’s wrap up by talking about your new certificate training program Healing Together, Transforming your Trauma to Triumph. We’ll link to that in the show notes. Tell us more about what this training program includes who it’s for and what you’re trying to accomplish through this.

Dr. Helen Sairany 43:38

So we kind of talked about what inner work is and how the and I like to call it the childhood baggage, which happens to be the title of my third book. That childhood baggage shows up in your relationship with money. We now know that. That childhood baggage shows up in your relationship with your significant other. And guess what? That childhood baggage bleeds all over you in the workplace. So the corporate likes to think about how well we’re back where we should function as if the human is going to shut off the emotion the second they walk into the office. I wish that was the case. I wish that was the case. But we’re all interconnected. We’re all interconnected. Just like our family. I’m sure you read the bones of family theory in my second book, how a family is interconnected like this, right?And for the family to proceed, everybody has to do their work. But the second one member comes out, the whole you know interconnected unit gets disrupted. Let’s say that is addicted to alcohol or gets in prison or they go through divorce whatever, there’s so many adversities in life. So if one member is not able to continue, the whole interconnected unit gets disrupted in which means someone else needs to pick up the role of the individual that got off of the system. Same exact concept with work system. Works system is no different than family system. But what does the corporate do the second an individual goes rogue. They treat that individual like a sacrificial lamb. Right? Cut the head off. And it’s only a matter of time for that problem to surface again and again and again. So we don’t like to think because thinking is hard. Excuse me, we like to judge. So this whole certificate training program, it’s about how the childhood baggage bleeds all over you. How many bosses are narcissist until you like we know what maybe I’m the common denominator here. How many jobs, how many x’s how many, I don’t know what. But this is not about work. This is not about bosses. This is about the inner work. Because people don’t quit jobs, people quit people. And we all bring our own traumas, we all bring our own baggage into the workplace that makes a workplace that is already bad, even worse. So it is about you know, looking at the workplace from a trauma lens and looking about how it is time for us to have a complete look at how people are functioning as if they’re in a dysfunctional family system.

Tim Ulbrich 46:12

It’s great work and we will link to it in the show notes. Your website, Helensairany.com. From there, you’ll find the certificate training program all what’s included in the modules as a part of that. Also, if you haven’t already read one of two as Helen mentioned, there’s a third on its way book but the first two books Trading Grenades for Candy and The We We Don’t See. Both are available on Amazon. You can also find more information on Helen’s website, which we’ll link to in the show notes. Helen, this has been fantastic. As always, I appreciate your input, your perspective, I have a lot of admiration from your work. You’ve certainly taught me a lot and I know that will be true of our community as well.

Dr. Helen Sairany 46:51

Thank you so much, Tim. Thank you for having me.

Tim Ulbrich 46:55

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 archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist podcast. Have a great rest of your week.

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YFP 366: Your Medicare and Long-Term Care Questions Answered

Posted on July 4, 2024July 1, 2024 by YFP Media

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

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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