Choose the version of financial independence you are aiming for and write down your reasons and trade-offs.
Priya (an invented example) is 34, single, and has just run her numbers through the model from Lesson 5.3, "Full independence and the cost of the last stretch". At a 4% real return it gives her three ages: 38 for coast FI, 48 for barista FI and 50 for full FI, and she now needs to settle on one of them and put it in writing.
Your own model from that lesson produces the same three ages. Coast FI is when you could coast, barista FI is when you could move to part-time work, and full FI is when you could stop work altogether. Leaving all three open and choosing later can feel easier. Each one shapes what you do now, though, from the amount you put away to the skills you keep up and the way you discuss the years ahead with the people around you. A plan with one clear target is easier to stick to than one that tries to keep every route available.
Set aside about twenty minutes. Have your three dates from Lesson 5.3 in front of you, along with a blank page.
Start the page with a single sentence giving the version you've chosen and either the age or the year you're aiming for. "Barista FI at 48" works, and so does "Full FI in 2041". When two versions both appeal, go with the one you'd pick today based on what you currently know. You can change later, and the switching condition at the bottom of the page records the circumstances in which you would.
Priya writes that she is aiming for full FI at 50.
Next, put your chosen version side by side with each of the remaining two, one pair at a time. Under each pair, note what you get and what it costs you. Phrases like "more freedom" or "less risk" give you nothing to decide with. A freedom gain should be something you can picture happening, and a risk gain should be something you could go and check. Wherever your model gives you years and dollars, write those in.
Against barista FI at 48, Priya's choice costs her two years of shorter weeks, since 50 minus 48 is 2. What she gets is a plan that does not need S$18,000 a year from part-time work for fifteen years. Given the industry she works in, she doubts she could find part-time work in her fifties, so she has little confidence that income would be there.
Against coast FI at 38, she loses twelve years in which she could have chosen lower-paid work (50 minus 38 is 12). What she gets is a plan that does not rely on returns being kind for more than two decades.
Lesson 5.3 set certainty against time. Go back to that trade-off and write which side you favour and your reason for it. Priya favours certainty, and her main reason is that her mother may need more support in her seventies.
With a partner, the FI plan is shared between you, and that holds even when only one of you will stop working. Partners often want different versions: one wants full FI because it is more certain, the other wants barista FI because it lets them stop sooner. Either view can be reasonable. The plan still has to work for both of you, and a spending base, target number and model built around one person won't suit a couple who want different things.
Before raising it, write down the version and date you expect your partner to choose. Then ask them, record what they actually say, and mark where it differs from your guess and from your own pick. Lesson 8.2 goes through that conversation in detail.
Priya doesn't have a partner at the moment. Her page notes that if this changes, she will redo the decision together with her partner.
A switching condition is a specific event that would lead you to move to another FI version, worded clearly enough that you'd know it had happened. Most fall into one of four areas:
Health, such as a diagnosis or a parent's health. Work, such as losing your job, burnout or an unexpected offer of part-time work. Markets, such as several years of returns well below your central case, which would push back your full FI date. Family changes, such as a child, a marriage or a divorce, which almost always reopen the decision.
Priya will move to barista FI if her model at 46 puts full FI later than 53. She will also move if her own health or her mother's makes a few more years of full-time work unrealistic. In that case she plans to look for part-time work from 50 and build the bridge around it.
All of this fits on about half a page for Priya: her version and date, the two trade-offs in years and dollars, her reason for leaning towards certainty, and a switching condition she would recognise.
Read your draft as if a friend had written it. Is the reason for the choice their own, or something they read online? Would the switching condition actually trigger, or is it so vague that it never could? If a sentence would fit anyone's plan, rewrite it so it only fits yours. The activity asks for exactly this half page, so keep it tight.
Write half a page naming your version, your target year, the trade-offs and the condition that would make you switch.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).