Episode 393: Engineering Financial Outcomes

This podcast episode explores how to apply an engineering mindset to financial planning, emphasizing the importance of aligning strategies with client goals. It distinguishes between financial plans (designs) and financial projections (modeling), advocating for confident communication of planning decisions despite inherent uncertainties. The discussion highlights the necessity of understanding a client's true goals beyond surface-level desires like minimizing taxes, and introduces sensitivity analysis to prioritize impactful variables. A key theme revolves around quantifying trade-offs between competing goals, such as maximizing spending versus early retirement, using tools like Pareto frontiers. Case studies illustrate these concepts, including optimizing compensation strategies for Canadian business owners and making informed decisions about Canada Pension Plan and Old Age Security benefits using PWL's free retirement planning tool.