As a pharmacist myself, I understand that pharmacists and pharmacy owners face many challenges to keep your practices running smoothly.
By Mike Jaczko, BSc. Phm, RPh, CIM®
You must focus on the day-to-day management of your businesses as well as the risks associated with operating and practising a pharmacy. As individual investors you also face many uncertainties associated with volatile capital investment markets and a myriad of complex and often opaque investment products and alternatives.
A working knowledge of the fundamentals of both corporate and personal financial management is essential to achieving personal and family financial goals and objectives.
There is a growing need for financial planning assistance and yet there are very few Canadians seeking help. A report from Credit Canada (Credit Canada 2012 https://creditcanada.com/) indicates that only eight percent of Canadians use a financial planner. Pharmacists are no exception! Whatever the statistic, the takeaway is to encourage you to actively seek professional advice and find someone you trust to serve as a mentor, educator and coach so you can stay on track.
This column will identify and articulate important financial “nuggets” that pharmacists and pharmacy owners should be aware of and take action on, to help:
- Maximize the value of your pharmacy practice and overall net worth
- Achieve retirement with a lifestyle commensurate with your expectations
- Improve the odds of achieving your short- and long-term financial goals and objectives
- Better manage financial risk in both your commercial and personal life
Simply put, we hope to improve financial literacy for pharmacists and pharmacy owners in Canada.
There are three main reasons I have found that prevent pharmacists from meeting financial goals and objectives:
- Pharmacists and pharmacy owners are busy! I know how time-consuming your careers and businesses can be. Financial planning often gets put on the back burner. You might delay establishing financial goals or organizing a financial plan, you may dislike building budgets and resultantly spend rather than save. I know that we pharmacists tend to engage in activities that we are familiar and comfortable with – especially when time is such a valuable commodity. Finance and numbers generally are outside a pharmacist’s comfort zone. In a future article I will explain why it is important to start saving sooner than later.
- Harbouring unrealistic expectations can set you up for disappointment. I am not saying that pharmacists shouldn’t reach to grow. It is important to remember, though, that prioritizing and recognizing your like-to-haves versus must-haves is always a beneficial exercise. Many pharmacists start out after graduation with aspirations of a first home and that first new car. With time, planning for your children’s education (post- and often pre-secondary) becomes a focus. Beware: overextending and borrowing to live ‘the dream’ can be emotionally demoralizing and financially dangerous.
- Underestimating the resources required to fulfill your expectations prevents progress. Even basic fundamentals of financial planning like income, expenses and the importance of savings along with some rudimentary tax planning can prove to be a challenge. In my view, Canadian education is currently not focused enough on providing and delivering these essential financial skills to Canadians. Most parents are ill-equipped to educate their children because they fail to possess the financial acumen themselves!
Ultimately, my goal, with the Pharma Finance series, is to serve as your guide to meeting your personal and corporate goals, with a view to helping you help yourself to build personal and professional wealth.
Mike Jaczko, a pharmacist by background, is a portfolio manager, partner and member of K. J. Harrison & Partners Inc., a Toronto-based private investment management firm servicing families across Canada.