Why Six Figures Isn’t a Financial Plan | Tim Ulbrich, PharmD,  Your Financial Pharmacist, Co-Founder/CEO

This transcript was generated automatically. Its accuracy may vary.

Mike Koelzer: Tim, introduce yourself to our listeners.

Tim Ulbrich: Tim Ulbrich, co-founder and CEO of your financial pharmacist. We work with pharmacists at all stages of their career from just getting started to retirement, and everything in between at the intersection of pharmacy and finance. My passion, my mission, my work is focused on financial wellness. Graduated in 2008, came out with way too much student loan debt, had no idea what I was doing. Taught myself personal finance. Made a lot of mistakes along the way, and looked up and said, Hey, this shouldn't be that hard. And would love to teach other pharmacists, from those mistakes and what I was learning along the way.

So we've been at it now for about 10 years.

Mike Koelzer: You guys do amazing work. Through LinkedIn. I'm seeing some stuff on your posts occasionally, and as I go down, I sometimes see a combination of mortgage stuff and then the pharmacist salaries, maybe up in dollars, but down in value.

And it got me thinking that my wife and I bought a little house. This is back in, Early nineties, we bought a house, kind of next to the pharmacy a mile away. It was $70,000 roughly.

So we have the house for 10 years. We double the value. We sell it for roughly one $40.

We're thinking, well, we did pretty well in that. A little bit less than one 40, but just for around numbers. And I said to Margaret, I'm like, there's no way in hell this thing goes to two 80. You know, it's just not gonna happen. It could never go to two 80. Well, here, 20 years later, now it's two 80s. But as I think of pharmacists starting salaries.

Back when I started, let's say it's 40,000, okay, let's say that went to 80,000, but I don't think the average pharmacist salary is one 60. And so you tell me, but it seems like the houses have quadrupled, the salaries have not quadrupled, plus there's other inflation and things like that in there. So it seems like, sadly, with all my kids, it kind of seems like the middle class or.

I'm not sure exactly what class, but it seems a hell of a lot harder than when we got out years ago.

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Tim Ulbrich: Yeah. I think the data supports that, Mike. I think the feeling is real. You know, I get the chance to talk with pharmacists every day in all different seasons. I'm getting ready to retire and am I ready? Am I not ready? What's this gonna look like? I had a paycheck my whole career and now I gotta find a way to pay myself a paycheck. What about inflation and what's gonna happen to social secur? Right? All the questions. then there's the group on the front end, which I think is really. to what we're talking about here today are looking up saying, I get it. I'm

1 20, 1 30, 1 40, depending on where I live. But by the way, have you seen what my student loan debt is?

Have you seen what home prices are? And actually when you run the numbers, when you look at what those two things alone, and if I could add a third and fourth that I typically see result in someone saying, Hey, I make a good income, but I don't feel like I have any margin, it would be. childcare costs and then car payments. specifically the home, right? We're talking about 30 year mortgage student loans, you know, often these are hanging around 10 plus years. and then childcare costs are just extravagant, right? Often we see a lot of households with working parents, not always the case, but Significant And so they're asking this question. Hey, I went and did a doctorate level program. Maybe I spent six, eight plus years. under the impression that because I'm a pharmacist, I'm going to make a good income and therefore I'm going to be okay financially. And one of the things I try to shout from the mountaintops is a six figure income is not a financial plan. Now I still believe Mike and people out in, you know, the west coast, northeast, and in the DC area are gonna say, but Tim, you don't understand Right. Even with the challenges, we're talking about a pharmacist today making the income that they're making on average. If we have the right perspective and planning, I still think the path is there for them to be financially successful, but I do think it's a lot harder. And just to kind of add my own story onto yours, you know, I graduated in 2008, had a little over $200,000 of debt as I, 

at all the historical rates of appreciation of homes and you find all the reasons why it's not gonna apply to your own Sure some.

you know,

talking about the doubling numbers.

We would end up moving in 2018 here to Columbus. And, I remember buying our home here in Columbus at 3 45, 5 340 $5,500. I remember seeing the four and a quarter interest rate after we had a three point whatever on our first home. And I'm like, four and a quarter.

crazy

And, down to 3%. And here we are now, you know, at interest rates and continuing to stay in the high sixes, but the point is that you're making pharmacist income just to give you a data 200 69 440. The mean 69,440 was the mean 2000, okay? in 2010, it jumped up to 1 0 9 380. So we went from about, let's call round number 70 to one 10 in a decade. What propelled that? Well, we went remember to the required pharm d we

what was the report that said we're gonna have a mass shortage of pharmacists, sign on bonuses, salary shot up, right? that happened in that window.

Then we go to 2020 we go from about one 10, let's call it 2010 to one twenty five in 2020. So you can start to see the slowing down that happened. Really, really a flattening or decrease if we add inflation, especially through the pandemic years coming off

20, 20, 21. And then here we're in 2024.

We're at 1 37 now. Point of reference if people wanna look into this more. This data comes from the Bureau of Labor Statistics. This is a mean, and we know that means have problems, right? Means don't account for some of the extreme salary ranges.

we may see, and there are pharmacists that are out on the extremes. let's be clear

So

a median is probably a better number, but it's not too far off from this. doesn't account for different areas of the country. Doesn't account for years of experience, doesn't account for type of position.

So take the data for what it is. But nonetheless, if I look at from my career graduating in 2008, you know, to where shortly after someone was, you know, averaging about 1, 1 0 9, 1 10 to today's value, I look at that and say, well, one 10 to 1 37, if you just look at the numbers. Yeah. Pharmacists make more.

do, do, do

about even just the historical rate of inflation, which of course we've seen much greater than that here recently. When you start to factor that in, plus the appreciation of homes and the thing we're not talking about with homes, in my opinion, it's not just the interest rate. It's the interest rate plus the appreciation that's happened over a period of time.

What does that mean? Well, that means you need a bigger down payment. That means your monthly payment and what's happening to property taxes, by the way. of these trickle effects with these things that happen.So do pharmacists still objectively make a good income? I think they do. But is the purchasing power today, what it was 10 years ago? not.

It's just not. and it's typically because of the student loan debt, because of the home purchase and childcare costs are really the top three things that we see that, you know, personal finance is simple math. if you make $7,000 a month of take home pay.

you have $5,000 tied up in fixed costs. there isn't much breathing room. There's not much options to save, invest, compound time, value, money, or to do all the other

that we wanted to do. And so what typically happens, and the people I talk with are they wake up 5, 7, 10 years in, they're like, I. know, I've made a half million, million dollars plus of income.

I don't feel like I've gone anywhere and I feel like I'm stuck. Furthermore, the words I'll often hear are " I feel like I'm living paycheck to paycheck. How is this

Mike Koelzer: Yeah. 

Tim Ulbrich: It's possible because of what we're talking about here.

Mike Koelzer: Everybody lives up to their paycheck. I say to myself, why is so-and-so doing a TV commercial, you know, or why is so-and-so still on the road with this, or that band? And it's like, people live up to it , and on a smaller scale with pharmacists.

You get a good pharmacy job, but you gotta get a better car because it's further away and you have to get the childcare and you gotta get the clothes for the pharmacy and all that. And these celebrities are doing the same thing just on a higher scale, you know, so they all, they all live up to it.

Tim Ulbrich: It's the, 

Mike Koelzer: On housing, this is probably exaggerated, but between the inflation of the housing and the rates going up It's like people are getting like a quarter of the value that they did for their monthly purchase than they did, you know, whatever 10 years ago.

It's not like half, it's like, I don't know all the funky math, but it's like a quarter. my children, you know, it's like they're, they're making it on their own, but the housing cost just seemed extremely high to me. it does matter what part of the country you're into, of course.

Tim Ulbrich: It totally does. I think if I could add one more variable in there, I'll put myself in the group. You know, this is not a statement of judgment, but it feels like, as I overgeneralize a little bit, it feels like there's a generation that expected to live, come out and live at the

parents, my parents had took them 30 years to get the

where I came out and said, this is the home that we want. And so there's an expectation shift that has also happened. Now to the defense of that, there's also even a starter, what you call a starter home is very expensive.

 terms of

you can get it. But let me give you a couple numbers here for people that are listening. 'cause I think what. This really brings to life both appreciation of home value and interest rates. So if we go back to the good old days of 2020 when interest rates were 3% on a 30 year fixed rate, some people were in the high twos, at the time, lower than that on a 15.

But if we talk about a 30 year rate, if you were to buy a half million dollar home. and you put 20% down at a 3% rate, that would mean your monthly payment, just principal and interest was somewhere around $1,700 a month.

Okay? So if you think about pharmacists taking home pay seven ish thousand dollars is round numbers, $1,700, right?

We're looking at it. What about a third ish? You know? A little bit. A little bit more, If you were to try to achieve that same monthly payment, that same payment of $1,700 a month in the current rate environment that we're in today, that 500,000 home, to get that matching monthly payment, you'd have to buy at three 20. But here's Homes are

four years ago, not less expensive, not only would you have to get a lower. Home purchase to get that same monthly payment because of the interest rate, but it's that much harder to get a lower home payment because homes have continued to appreciate and the values have gone up over the last five years significantly.

I mean, you think of the historical rate of appreciation of homes, round numbers. I typically think of 4%. It's been a lot more than 4%.

know, in the last five years, so there's this double whammy effect that's going on, and then the market conditions are adding further pressure. So new construction is behind. So this is simple supply and demand. And what about all the people that are nearing retirement? Kids are outta the house that normally they might say, Hey, I might think about downsizing, but who wants to give up their 3% rate?

so

this supply demand equilibrium issue that's going on. all the while we've got other pressures with student loan debt and wage compression that's happening, simultaneously.

Mike Koelzer: Yeah. Well, as I think of my one fourth value statement, I guess that kind of explains it because round numbers, let's say it's 500,000, and then, you know, you'd have to find one for, I think 3 29 or something you said. But the 3 29 house compared to what it was just a bit ago, that would be like a $200,000 house.

In other words, when you're sitting in your living room, you're like, this place is 75% worse than I thought I would have, you know, because the price is down and you're not getting as much for that money. So it's like, it's a, it's a beast. It's a beast right now on the home front.

Tim Ulbrich: Now there is of course the counter argument that you might be able to refinance in the future. 

Mike Koelzer: Mm-hmm.

Tim Ulbrich: stay at high sixes Sevens, will that come down? you never wanna make a 30 year decision on a,

Mike Koelzer: Right?

Tim Ulbrich: or wish that something's gonna happen in the future. So now the argument is, so what, what am I supposed to do? Rent. Rent

up

 trickle down effect. So this is where I have a lot of empathy with the new graduates coming out and why I'm so passionate about, doing some of the education around this is I still do believe my heart of hearts that these folks can be successful, but it requires a lot more and we, we can't be living off of the advice of our preceptors.

Like those days are gone.

so your preceptor that's telling you that, hey, you gotta save 30% of your income. Well, you know, they might have had a hundred thousand dollars of debt, not 200,000. And their interest rate on their student loans might have been like 2.8%, not, you know, this fall, Mike, on unsubsidized loans, which are most of the graduate school loans, they were north of 8%.

I mean, so we're just looking at such different economic conditions and times that yes, you can be successful, however, it's a mindset shift and unfortunately in some parts of the country that may be a little bit easier than others, right? salaries aren't gonna translate, you know, accordingly necessarily with cost of living.

Mike Koelzer: Tim, back when. We first got apartments and things when we were younger.

I was born in 66, so let's say early nineties. You know, I'm 25 or something like that.

when you've got an apartment, you'd have to fill your car up and you'd have these stereo speakers, you know, they were. Two feet by three feet. You had two of those. You had a turntable, you had to have a desktop computer. You had to have a spot for your photo albums.

Radio Shack, I saw this a few years ago. They had an ad from 1984 and they say the phone has replaced the 20 things on this page. My point is, as the phone replaced this page from Radio Shack, it almost seems like something has to click where, this is kind of sci-fi, but, the cars.

have to be mass produced like iPhones and so things just plummet, you know, and the housing goes to this, I don't know, tiny houses or something that just plummets it, something, it almost seems, I hate to say that, but it almost seems like something has to plummet, mass produced, to, to make this work.

And You can't put your hopes on that and that's where business is so important because you're like, yeah, maybe Mike, but you know, we're dealing with reality here, so we have to go percent by percent and it's gotta be a plan and all that kind of stuff.

But you look at it from my age and you're like, crap. What's happening?

Tim Ulbrich: Yeah, and what I hear you saying there is like, where's the pressure release valve gonna come from?

Mike Koelzer: Right. 

Tim Ulbrich: It's simple math. when I'll walk through kind of a standard budget, unless you have two, pharmacist household, or two higher income earning professionals, where you start to, get to a scale where you mitigate some of these issues, 

You have a house that's spread across two incomes, When you look at just a single pharmacist income, like the math doesn't lie. If you look at a very reasonable 400,000 home, a standard student loan debt, a normal car payment, normal childcare costs, there just isn't a whole lot of margin, and I think that's one of the realities that we have to have, when I was talking about a mindset shift. when I graduated in 2008, this was still in the day of sign on bonuses and, new cars were showing up in the

when people were at graduation. We joke about it, those stories are like still out there. And I still think we're on this tail end of like the expansion to the doctorate degree and like this, this persona of like pharmacists and this six figure income. we have to really challenge like what is that and how far does that go and what does that mean? I still think a six-figure income can go a long way. But a six-figure income is not a ticket to, like, you don't have to worry about anything financially. The good thing about this conversation is the numbers. You know, if you're starting some of this early, it doesn't actually take that much. To be financially successful. Now the big if is, if you're able to start this early and not everyone is able to do that, of course, for various reasons. But, you know, time value of money and history of what has happened since the Great Depression, of course, times can change. cycles will come and go. and while the reasons will be different, the outcome has been consistent over the last, 90 to a hundred years at least.

Not that that's predictive of the future, but that's the best we've got, you know, at and it Huge amounts and huge sacrifices to set yourself up in a position to be financially successful. And I think that's part of the story we have to rewrite is when I talk with a lot of pharmacists, especially those that are in that mid-career or later, but often those that are on the front end, if I were to say, Hey. You know, by the time we get to retirement, like I think very well, you need to be a multimillionaire and, you know, here's the plan to support it. Like, until I can actually show them the numbers, it's like wonky math, like I don't believe it. Right.

and you know what we need to Reshift is a story of like, it's not about becoming. Stupid rich. It's not about necessarily building massive wealth, although some people will be successful in doing that.

about diligent planning.

And you know.

10, 15, 20% of their income, which I think is reasonable for a lot of pharmacists, especially doing that early in their career. a lot of pharmacists, I would show you a plan that when we get into the forties, we should be hitting a net worth of a million dollars or more. Very feasible. for a lot of up and say, Hey, I'm 20 years in.

I've earned a couple million dollars more of income. I don't have a lot to show for it. Well, now the

You

So there is hope, but there are also real challenges.

Mike Koelzer: Speaking about success and how to define that, I saw an article. somewhere online it talked about different levels of wealth. You say. there's this level of richness and you feel that everybody lives the same.

Once they're at whatever, let's say 10 million a year or something like that, let's say 10 million, income a year, everybody lives the same. And they were showing these brackets like million to 20 million. You live like this, 20 to 40, you live like this, 40 to 200, you live like this.

And they were just showing that it's a lot different. As it goes up. But then Tim, my wife and I were down in Florida six months ago. And, you look out to the bay and you see this yacht and you know it's probably costing 10, 20 million and you see a yacht next to it that's one foot longer.

And I look at the yacht that's on the left, that's a foot shorter, and I say they're envious. You know, 'cause

Tim Ulbrich: Totally.

Mike Koelzer: no matter where you are, even if you got that yacht, you're always looking up, where's this and that. So there's different definitions of financial success and as we're alluding to here, it's not the success of your parents necessarily.

Tim Ulbrich: No, but that's often the stories we care about. 

Mike Koelzer: exactly.

Tim Ulbrich: You know, so much of the financial work, especially when you look at the behavioral part, do we understand some of the money scripts and stories that we are raised with ugly, because they do have an influence. You know, for some people when we talk about a million dollars or more, even if that were to show that that's not enough,

idea because of how they grow, like that's like, we can't talk about that. That's just a story. It's a, it's a money script and

Now, everyone's situation is different and once we can tap into that and be in tune with that. We can start to see it for what it is and, you know, take some of the good and rewrite some of the story of things we would wanna change. comparison I think is such a big part of that. And this is why I firmly believe that, who you surround yourself with, is such an indicator. Of where you're going to be going in terms of financial success. And here we're talking about, I think, really building a long-term successful financial plan. We're not talking about necessarily, big, big time wealth, but finding that right balance of what we talk about saving for tomorrow and living a rich life today.

Both are important, who are you surrounded with and how are they spending their money? And what homes do they live in and what activities are they doing? It depends and everyone's vision is different, but we have to first get clear on what we want and why we want it.

Because until we define that, we're gonna be flying at the whim of everything that's out there influencing us every hour of every day.

But when our kids were younger it was some of our best friends. We'd get together on a Friday night, we'd order a pizza and we'd Put the out for three or four hours, inexpensive activity, but we were all on the same page of like, this is a valuable experience,

know, for us. And if we were to go on vacations together, like this is, you know, what the budget is and how we're prioritizing it and we're on the same page, you know, together. And so who your, who your circle is, matters a

Mike Koelzer: I've got this funny picture of my late father, who was my business partner and so on, and you always hear about people saying, well, all the kids, they have the nose in their phone, no one's communicating anymore. And I've got this picture of my dad, he was probably 50 at the time and he is reading a Red Book magazine that's a woman's magazine.

I don't know if Red Book is still out there, but it's a woman's magazine. , A woman's fashion kind of magazine and women's stories and things like that. And I have a picture of him up at a cottage reading it. I know that, Magazine was probably six or seven years old. Here's my dad looking at the six or seven years old Woman's magazine.

The point is we've always had our nose and stuff that's just what people do. brother is in advertising and he would get free GQ magazines or something because of the people that were advertised a page in gq. They would bring those up to the cottage. And so I'd go up to the cottage, just a, just a, a normal schmuck, you know, up there with my flip flops and a t-shirt and things like that.

Tim, I tell you, by the end of that week, reading a bunch of GQ magazines, I needed a new wristwatch.

Tim Ulbrich: Right.

Mike Koelzer: It was just obvious, like, I need a wristwatch now because you've seen. Ad after ad after ad, going back to the point of who you're surrounding yourself with.

And that's an age old story of keeping up with the Joneses and so on. But, you know, there's,there's some physician friends of ours and I know the reason that they're going to the Cayman Islands and going to Disney and all that stuff is because it's no fun to come back, you know, April 1st after spring break and have everybody else saying they went out of the country.

And it's like, well, we went to South Dakota and saw Mount Rushmore or something like that. it does matter who you surround yourself with.

Tim Ulbrich: It really does, and this is why I think the vision piece is so important and traditional financial planning leaves us out, right? Because it's, let's jump into the investments in retirement and all of the things, you know, that also are important. But money at the end of the day is a tool you know, money only has value because we all agree it has value. So what, what are we trying to do and accomplish? I always think of it as like a rocking chair vision. when I look back and hopefully if I am 75, 80 looking, my kids and grandkids, like what are those experiences?

How do we use the money? In a way that was really going to allow us to have the fulfilling experiences that we wanted, literature really shows us that when you look at happiness and money, there's a great book out there called Happy Money from some academics. Elizabeth Dunn and her co-author, I'm drawing a blank on, they studied the connection between happiness and money and its experiences, these are the front runners when it comes to actually translating currency.

That is memorable, right? Isn't that what we're trying to do? Right? there's other things we need to make sure the money doesn't run out: things to take care of our family, et cetera. so I think this vision piece though, if we Don't it. We're gonna plan and we're gonna find ourselves saying, well, why are we spending money here and not here? And it might be that we realize we might realize it later. And one of the personal finance authors that I love is his work that I follow where Meet said, he wrote the book, I Will Teach You To Be Rich, which is a really good, just kind of introductory personal finance book.

But in his opening chapter, he talks about this, it's called Money Dials.

that you actually care

So

 geek, so if, if I can invest in anything that's gonna provide me with convenience, I'm willing to pay for it.

What does it mean to you, and let's prioritize those and make sure we're funding those, but equally important, what are the things that you might be spending money on that you actually don't care about? The one that comes up a lot is cars where, you know, I might talk with someone who has a thousand dollars a month car payment and I was

What's going on? You must love cars. What's it's like, they've just kind of fallen into a thousand payments. So it's, it's sort of that like, wake up, what are we passionate about? What do we care about? And are we spending our money accordingly? And then the things that we're not, let's pull back so we can allocate those to the things that actually do matter. visual money dials because I think to what we're talking about here with comparison, I think the result of comparison is we end up wandering into. we spend our money, we lose the intentionality and then we wake up at some point in the future realizing like, ah, we like missed, missed the boat here.

We thought

Mike Koelzer: Yeah.

Tim Ulbrich: and, and it really didn't.

Mike Koelzer: Well, and Tim, you probably know the psychological term for this, but it's where you wouldn't do something to gain $10. Like, as someone said, Tim, go out there and get my phone from the car. You know, your neighbor says that. It's like, no, I'm not gonna do that for 10 bucks.

But. You would do like triple that too. Not lose $10. You would maybe, you know, return something, you'd go five miles to the store because dammit, this was on sale for $10 and I paid $10 more for it, and I'm gonna get that $10 back. I forget the psychological term, but it's the same $10.

don't care if you gain it. But you don't wanna lose it. That kind of thing. And the point I'm making there is it takes a lot of work to know what's important to you. 'cause we might even think we know what's important to you. It's like, well yeah, but why the hell do you drive five miles to get that $10 back when you wouldn't do that if someone gave it to you to get their phone?

That kind of stuff. We don't even know what we want sometimes. And that's where the value of really looking at it like you can guide people through matters.

Tim Ulbrich: Yeah. Loss aversion, is what you're

Mike Koelzer: Loss aversion. 

Tim Ulbrich: Yeah, we feel the losses psychologically more than we feel the rewards and,

is why systems are so important. And personal finance because the greatest barrier typically to us achieving our financial goals is ourselves.

It's human behavior.

Dr. Daniel Crosby talks about this in his book, the Behavioral Investor, that the number one variable that's likely to get in the way of you achieving your long-term investing plan is your own behaviors of what you do. Because we're irrational human beings. So how do

that? We set our goals, we set our vision, we set our system, and we get the heck outta the way.

When you actually look at the data, nobody wants to hear this because who wants to pay for a financial advisor or planner?

that's just helping them not make their own mistakes, but the actual true delta value I. of the risk that's in timing the markets look at the decisions people have made over the last month or two that they're like, if you would've Been three months, you look up and say nothing's happened in the markets this year. flat,

but the number of decisions that have been made is unbelievable.

Right? And that just speaks to us, we can say all that we want, that we have the risk tolerance, but loss aversion tells us. That we don't, because we feel the loss is greater than we feel the wind. And so what do we do when the market's going up and it's in fuego? Everyone jumps in to buy. It's the worst time you could buy.

When the market goes down, we all bail. It's the worst time to lose, right? You don't have

until you actually solidify your losses.

But if you look at the long term, the systems are the antidote to loss aversion.

You know, the work to be done is to set the vision, set the goals, look at the spending plan and the budget, and then automate the heck out of it and get yourself outta the way.

It sounds so easy, but it's so hard. 

Mike Koelzer: Tim, I've had so many times in my life where I've worked out for a few months here and there, and four years ago I said, damn it, I'm gonna walk every morning. So I go out four to five times a week, 3.3 miles. It's my system. I don't hate it. I don't love it.

I just. Do it. and though some of my kids will pop up, dad, you should go to the gym. You should do this, you should do this. It's like, no, I got my system in place. I do it, I don't think about it. Do it whenever. And so it's the same thing with eating, exercise, and money. The time to be thinking about it is not then it's a long time before.

And just putting your system in place

Tim Ulbrich: Yeah, we only have so much thinking energy and capacity in a

and a month. And, and that, that's where we get in trouble and you know, we all like to think that we can try to predict in time. And what about this, what about that?

you think about in the last period of volatility, like, well the market's down or the market's you know up is, would this be a good time to move my funds or do that?

Like the best thing you can do?

nothing.

when you start to recognize there's a level of humility that comes in, but there's also a level of freedom that comes into that. Like

the vision and set the 

you know, and

automatically moving the funds and the markets and you're rebalancing, it's doing what it's doing your work is done, because you put the hard work up front and you set the cycles of automation in place. So, yeah. I'm a firm believer and it's vision, it's goals, it's automation, and it's get the heck outta the way, you know, the

Mike Koelzer: I had three of my brothers on the show about a month ago, and that was fun 'cause we all grew up in the pharmacy. They took different paths than I did, but it was a fun episode for me. We talked a lot about how our dad, kind of soaked.

Up from being in that family more than we felt we learned it. But that said, we all agreed that it seems like some of the business and financial things we know are just inherent in human beings and are probably not. They felt inherent in us because of our upbringing. What are some, quite obvious, And I know you don't want to pick on your clients, but what are some quite obvious things that you've seen that's kind of hard to believe people think that or, or don't know this. What are some real obvious ones that seem kind of like they're almost born in you but not in others.

Tim Ulbrich: The

Mike Koelzer: Yeah.

Tim Ulbrich: are coming to mind. I mean, I see a lot of, Kind of self-inflicted wounds on like a fixed income mentality that like, Hey, I started here and this is kind of a ceiling. And I think it goes back to the story that we were talking about . Hey, I'm gonna graduate with a doctorate degree.

I've got a six figure income. And, if you're hearing that message in adopting it like I was in my mid twenties, there's a real gift of having that income early in your career if you're able to leverage it and use it. Time, value, money. But the curse of that is you're putting the ceiling right away. In your mind of what is ultimately PO. And I think a lot of pharmacists, to be frank, cannot break through that.

and they're not aware of, you know, gay Hendrix talks about this in his book. The Big Leap that we create. Ceilings where we live in

zone of kind of comfortability, and we have an upper limit of whether, we're often not aware of it, it's in our subconscious that we live within this mode of comfort.

and so, you know, that has a challenge to be able to break past

The other one I see a lot of, you know, simple types of things is that the financial plan is as simple as you live off of, less than you make, and you allocate the difference. to your various goals that you have. I think about that in my upbringing and growing up in small business and the lessons that we were taught. And I think to your point that you're making there with your brothers, some of that was learned behavior through just observing, um, and, and really soaking that up. But. That's, that's the simplicity of the financial plan.

much of income unless you can grow we have to live off of less than we make and then and figure out what we're gonna do. But despite the simplicity of that, the point I'm making here is to actually implement the behavior in the systems Is, is the work, right? Is

and there's a lot of overconfidence I see.

Because of that six figure income. What often happens is that overconfidence kind of hits reality, and then I see a humility start to develop, you know, 10, 15 years in like, okay, maybe this isn't progressing along as much as I thought it would.

Mike Koelzer: Well, that's true because we think that we absorbed business stuff from my dad, but really maybe what we absorbed is the longevity of seeing him doing this for 40 years and kind of doing the same thing every damn day. You know, going to work, investing, making smart decisions. And that's, that longevity piece is probably what is ingrained in us, which, some people just maybe don't have.

Tim Ulbrich: One other thing I wanna add. I was just thinking about as you were sharing that is it, it's one thing to know the calculations of compound interest and time value, money,

to actually believe them and understand them in a way you're gonna see them through.

I often will share these examples and stories when I'm presenting with a group of pharmacists and I'll have to pull out the savings calculator so they don't think, this is just like my wonky math.

even with that, it seems hard to believe, right? if you save, for example, if you save a couple hundred thousand dollars in the first five years of your career, when you wake up 35 years, that math tells us it's gonna be worth a little over $2 million.

Meaning

 90% of that value came from the growth, not your initial investment. you that and understand it. But do you believe that enough you're willing to set aside money each and every month trusting in that because you can't feel it really for the first thing. 7, 8, 9, 10 years

you start to get enough of a mass that you then, get a

a million dollars the market goes up 7, 8, 9, 10% could go the other way, of course. But

 and Eventually you start to get to the point where you see that, at some point this portfolio is gonna earn more than I'm earning as a pharmacist,

It's easy to believe it then it's hard to believe it upfront when you're putting away, let's say 20, 25 grand a year, and you're like, I got real expenses right in front of me.

Mike Koelzer: Tim, you're right, as far as people's expectations are concerned, because if you were a pharmacist and went to some place and they said, we're gonna give you 80,000 a year, your first question on your mind is, okay, fine.

What's next? Where's the payoff and how much ownership am I getting and when is this gonna go? One 60 and three 20? That's your mindset. But a lot of people, they come in and they hear the 1 37, 1 37, 1 37, and that's, that's where it goes.

And they don't want it to go lower. They don't think it's gonna go a lot higher,

but you, you know, it just stays there. And, and, and we've seen what the numbers do, then it goes down.

Tim Ulbrich: Yeah, and this is one of the reasons I think a lot of pharmacists aren't advocating for themselves in terms of salary negotiation raises over time.

you know, it's a comfort level, but it's a lack of understanding of, you know, if you make 1 35 and they give you a $3,000 bonus for your goodwill to the organization, but inflation was 3%.

every expense you have, of course is gonna be subject to inflation, but

power just went down. So you, you, you know, I think this fixed ceiling and mindset

long,

those early year raises, right? Everything gets factored in from those, next, your next job that you take externally, internally, your percentage is going to retirement.

all the things kind of start from that point.

But what

Being successful in my experience with negotiation is when they kind of get out of that lock or fixed mindset where they say, well, wait a minute, What does employment mean? employment, in order the definition of

know as a business owner, the only

employment. so if you understand that as an employee. It's a value equation.

organizations, this is gonna go farther than others, right? This conversation. But what value am I providing? Not what role or job title was I given?

 What's the return on investment? How could I potentially improve that? And am I willing to then advocate for that? And if you're that good and you're, you're able to advocate, they're either gonna But there should be some other opportunities that are out there as well.

But Eight

pharmacists aren't comfortable having that conversation. And I think part of that like that mindset,

the gates of,Hey, I make this and it's kind of that safe, that safe place.

Mike Koelzer: Well, you're exactly right, Tim. and a lot of times that's why some of the advice now is you gotta switch jobs every two years to get this, because there's some employers that are like, we've got them mentally locked into this.

We've got this range that we're comfortable with, that they're comfortable with, and we're not gonna budge a whole lot from this. And I've seen it firsthand, where sometimes the employee pharmacist is not comfortable with those kinds of conversations, and sometimes rightfully so, because being an owner.

I've had it where people have come in and spoken for themself and the value of this. I'm like, ah, he's kind of an ass. I don't want to deal with that. I want the status quo. I like, yes men and I want people that are all gonna be about this thing. And if I pay him 30% more than that, what does that do for the rest of this and that?

And I don't want people like that. I'm just saying that sometimes I'm nervous. is valid, but that's sometimes a reason to test it out and then take it to a company that does appreciate that because you might, your grave a little bit with those conversations in that company, but that's something you have to face and you have to speak for yourself.

Tim Ulbrich: Well, yeah, and you have to, you have to understand your situation and understand your leverage and

employee and the organization and what are you trying to do. I mean, if you come out with guns blazing, Right, with no clear idea of what your role is or an overstated value

you're absolutely, digging your grave, and, This could terms

Hey, I'm, I'm two years out. I've got all this experience and value to offer. Well, do you? Do you know, are there 10 people lined up, you know, for the job that you have now that want it?

So you have to understand the,

but. If you are truly a key EM employee and person that's adding value and providing value. You

about this from the employer standpoint. As our business grows, unless I want to be in the business 40, 50, 60 hours a week indefinitely, I need to keep our key people to run the business,

and to provide the value and service that we wanna provide to our clients, which means that, you know, I need to have the right people and I need to retain the right people, which means that if there's a compensation problem that they're feeling that I'm not aware of, I do wanna know that.

Now I'm not sure where we'll be able to get, but I out about that

years when, when they're going. So I can go both ways, for sure.

Mike Koelzer: Tim, someone is pulling up to the pharmacy now or home, they're listening to us. What's something that they could do with, 30 seconds on their hand, sign up for your newsletter? What would you suggest someone do?

Tim Ulbrich: Yeah, just go to our website, your financial pharmacist.com. it's kind of a choose your own adventure of resources. So pick the topic, whether it's retirement planning, debt management. Kids college, Home purchase real estate. Find what's top of mind for you. We've got a library free resources and we've got a team of certified financial planners for those that are looking for that one-on-one assistance.

Mike Koelzer: Now that's.

Tim Ulbrich: activity and you can check it later when you've got more time on your hands based on what your interests are.

Mike Koelzer: Tim, thanks for your time. Always a pleasure talking to you. There's not too many guests I have on that are important now, but also are important, you know, 50 years from now from someone listening to this and taking some action. So, great having you on.

I know you're busy. I appreciate your time. Our listeners do and, and it's really nice talking to you again.

Tim Ulbrich: Thanks for having me. I appreciate it, Mike.