I keep a risk register for my FI plan

At work, no project of any size gets going without someone writing down what could go wrong and who owns it. Then we go home and plan the single largest financial undertaking of our lives — thirty years of saving — with a compound interest calculator and a feeling of general optimism.

So I keep a risk register for my own plan. It takes about ten minutes to review and it has changed more of my decisions than any spreadsheet has. Here it is.

Inflation risk on cash and anything yielding under about 3%

Mitigation: don't hold excessive cash.

The subtle version of this risk isn't the emergency fund, it's the money that quietly stops being temporary. Cash held "until I decide" for three years is a decision, just not a good one.

Principal risk on stock market investments

Mitigation: don't sell because the market has gone down.

Note that the mitigation is behavioural, not financial. There's no product that fixes this and no asset allocation that removes it — you either hold or you don't. Which means the useful preparation is deciding now, in writing, what you'll do in a 40% drawdown, because you will not be thinking clearly when it happens.

Bad information — including me giving it

Mitigation: always include a disclaimer that I'm not qualified, and pass on my sources wherever I can.

I put this one on the register because writing publicly about money changes the risk profile. If I'm wrong in my own spreadsheet, I pay for it. If I'm wrong in public, someone else does.

The government can change the rules at any time

Mitigation: none. There is genuinely no way to mitigate this.

Every account I use exists at the pleasure of a future chancellor. Allowances change, thresholds freeze, age limits move. The only sane response is to avoid building a plan that only works under exactly today's tax regime — and to accept that some of your assumptions will be repealed.

Having risks on the register with no mitigation is fine. Pretending they aren't there is not.

Zombie apocalypse / end of the world

Mitigation: none needed — money becomes meaningless anyway.

Slightly flippant, but it's on the list deliberately. Part of the value of writing risks down is identifying the ones you're consciously choosing to accept, so you can stop spending worry on them.

Becoming Scrooge

Mitigation: don't go too far in the pursuit of wealth. Focus on the journey, not the destination.

The 80/20 principle applies: about 20% of your decisions drive 80% of the outcome. Housing, transport, and how much you earn are the 20%. Agonising over whether to buy the branded pasta is the 80%, and it costs you something real — attention, and the sense that any of this is enjoyable.

This is the risk I think the FI community is worst at acknowledging, because the behaviour that causes it looks identical to the behaviour that makes the plan work.

Poor health

Mitigation: exercise and eat your five a day.

The single largest threat to a plan built on decades of earning, and it gets a fraction of the attention that fund charges do. I track steps rather than anything more elaborate, on the basis that a mitigation you actually do beats one you design beautifully and abandon.

Redundancy

Mitigation: an emergency fund, sized to the risk rather than to a rule of thumb.

The thing I hadn't appreciated: this risk increases as you get more senior. There are fewer roles at each level, so the search takes longer, and your essential spending has usually risen to match the salary. The junior version of you could find work in a month and lived on very little. The senior version can't and doesn't.

So the emergency fund should grow with seniority, not stay at "three months" forever.

Lifestyle inflation

Mitigation: remember that happiness = reality − expectations.

Every pay rise moves both terms. If reality and expectations rise together you have done a great deal of work to end up exactly where you started, except now you can't stop.

The principles doing the actual mitigating

The register is only half of it. These are the standing rules that sit behind most of the entries:

• Low-information diet. Don't obsessively follow financial news. More input does not mean better decisions.
• Apply your own mask first. Sort yourself out before friends, colleagues and charities. Not selfishness — sequencing.
• Dig a well before you're thirsty. Build the emergency fund while everything is fine.
• KISS. Keep it simple. Complexity is a cost you pay in attention every year forever.
• 80:20. Twenty percent of the inputs drive eighty percent of the outcomes. Find them, ignore the rest.
• Outrageous optimism. If you think the world will be a good place, you behave in ways that make it more likely to be one.
• What got you here won't get you to your destination. The habits that took you from zero to your first ten thousand are not the ones that take you the rest of the way.

Try the pre-mortem

If you write nothing else down, do this one, borrowed from The Joy of Work: imagine it's ten years from now and your plan has failed. Write the story of how. Then go and fix whatever you just described.

Most people discover their plan doesn't fail because of fund charges or asset allocation. It fails because they got ill, got bored, got divorced, or got a promotion and spent it.

Not financial advice — I'm not qualified. This is a personal planning tool, and the useful bit is the exercise, not my particular answers.