This is a guest post from Rineil Perez PharmD. He shares how his community pharmacy position lead him to jump into entrepreneurship outside of pharmacy.
As far back as I can remember, I was always interested in earning money and building wealth.
I was naive about finances and wealth generation but I intuitively wanted to earn my own money so I could buy my own things. To accomplish this early goal, I did it the way I was taught in school; by actively trading my time for an hourly wage which manifested itself as me being employed in a fast food restaurant.
Initially, the money was great as a 16-year-old but the novelty of finally earning an income wore off and I began to wonder how to make my time more valuable. Enter higher education through pharmacy school.
Becoming a pharmacist is a highly specialized career choice which is both a good and bad thing. On the positive side, you will enter a profession that nearly guaranteed a six-figure salary right out of the gates all while being a valuable member of the health professions.
On the negative side, that high entry salary almost plateaus instantly -- plus you’re likely loaded with a high student loan debt and very narrow career choices since your education is highly specialized.
I eventually graduated as a pharmacist in 2014 and 10x’d my starting wages as a minimum wage employee a little over a decade earlier. For many, making over six figures is enough but I personally wanted more because I knew that in order to keep earning my salary, I needed to be the proverbial hamster in the wheel. At any moment, if I stopped working, my income stream would dry up, leaving bills unpaid and unraveling the lifestyle I worked to build and maintain.
I fell into the American consumerism trap of incrementally increasing my standard of living alternatively known as lifestyle creep; next thing you know I was working day in day out just to maintain my standard of living.
Now I was stagnating, making no progress because it seemed like each day was on repeat. I needed to find a way out of this never-ending loop; I decided to pursue financial independence; this seemingly crazy idea that you can generate passive income that can exceed your earned income if you are methodical and persistent over a long period of time.
First order of business, I needed to drastically increase my savings rate while still paying off my student loans and keeping my overhead costs low.
One of the main hurdles that prevent me from allocating upwards of 70% of my income was the tremendous student loan that I carried. It ain’t cheap to become a pharmacist or any other healthcare professional. With great salary, comes great student loans which take on a life of their own as they continue to grow beyond the original principal borrowed.
My first encounter with the amazing power of compound interest was through my student loans.
I originally took out over $100k in student loans but after a few years, it quickly ballooned to 1.5x the original amount I borrowed. I was bamboozled how this could be possible. It was probably my greatest financial lesson, not to mention also my most costly.
I wanted to learn to harness the power of compounding interest to build me wealth rather than have it accrue interest toward my loans. After a few months of research and getting over my fears of placing my hard earned retail pharmacy money in any account other than a basic savings account, I finally mustered up the courage to place all my hopes and dreams into the stock market in the form of an all market stock index fund.
The book that really transformed my outlook on investing is none other that John Bogle’s book “Little Book of Common Sense Investing.” It was so simply written and gave me great insight on the efficacy of investing in a simple index fund because it was so low cost and proven to beat the majority of actively managed funds.
Now that I had all of my systems in place in regards to automatically paying myself first every month to save up for my early retirement with financial independence, I was back to the thought that I still need to actively be the “hamster in the wheel” in order to fund this dream of financial independence.
I came to the conclusion that I needed to keep the income stream flowing without me actively trading my most valuable resource available: my time. After numerous podcasts, audibles, and good old-fashioned bound book reading, it was as if someone lifted a curtain to expose a whole world filled with people who aren't employed by corporations that are creating value and being compensated handsomely for it by society. Suddenly, I realized that my problem of trading my precious time for wages could be solved by becoming an entrepreneur and building additional passive income streams. As an entrepreneur, I would undertake financial risk in order to provide valuable solutions that would translate to a stream of income.
With so many different ways to earn a living and achieve FI outside of a W-2 employment, I didn’t know where to start.
I dabbled initially with the thought of establishing a lucrative real estate investment company and becoming a landlord (it still is my long-term solution) but I needed a low-risk way to validate this idea of detaching myself from being an employee to becoming an individual who can make my own way through entrepreneurism.
With the help of my newly found business coach and friend, I realized there were so many tools and resources out there to help me reach this goal. One of the first lessons my business coach planted within me is that I needed to create a schedule and commit myself to making my dreams of entrepreneurism a reality; I needed a set schedule every week and actionable steps in order to reach this goal.
This leads me to my first entrepreneurial venture of e-commerce via amazon's platform of FBA (Fulfillment by Amazon). It is truly exciting to continually learn and develop skills weekly and just like money over time, this investment in becoming an entrepreneur will compound and pay dividends towards my overarching goal of financial independence.