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You know those “firewalkers” who walk on hot coals without burning their feet, shocking onlookers? There’s no magic: They rely on a few simple tricks that anyone can do. (Here’s a quick primer, if you’re interested.) F.I.R.E. (Financial Independence, Retire Early) is like that. With a few simple principles, you can walk a walk that amazes the masses.

The steps are simple: 1) Imagine, 2) Plan, 3) Budget, 4) Save. And I’m not just talking about some theory. These are the steps my wife and I took to lead the life we wanted to lead, and not the ones we felt like we should be leading.

First, note that my wife and I were (and are) “DINKs.” Dual-income, no kids. But people with families can apply the same principles, and many find that the opportunity to spend more time with their children especially motivating to pursue F.I.R.E. And single people, while having some disadvantages, should really be even more careful to save and plan, as they have both the freedom to live as they please and lack the luxury of a partner to support them.


This sounds like the easiest and most-fun step, and it is. But it is also where most people fail. they can’t imagine giving up that prestigious job. Or the luxury car. Or the too-big house in the chic Zip code. The first thing to do is get over the “r word.”

  • Redefine Retirement. I actually hate to use the words “retire” and “retirement” in the F.I.R.E. context. Those r-words suggest a permanent life of leisure for a smiling grey-haired person straight out of a pharmaceutical ad. And that life of endless golf, luxury travel, and beachside condos is two things: really boring and incredibly expensive.
    • Having nothing to do may be fine for someone exhausted by 50 years of hard work. But for someone looking at 50 years of a blank calendar, not working can be not just dull but detrimental. Keeping a foot in the employed world can decrease loneliness (an epidemic among seniors) and improve physical and mental health, as well as keeping the pressure off your nest egg. This New York Times article explains the benefits.
    • The societal pressure to have an extravagant retirement is the same as the pressure to have an extravagant lifestyle while you’re working. Intentional or not, having to save for a lavish, totally funded retirement is a great way to keep yourself tied to a job a lot longer.

Find Your Passion. I know. I hate that advice, too. It’s usually framed in a way that forces you to think about how to turn something you love to do into a career (which can turn something you love to do into something you hate). But what I’m talking about is thinking about how you want to live your life, not necessarily how you want to earn money. One of my passions is cycling, so I always want extra time to do that, great places to ride, and great weather. But I also ended up taking a part-time gig in a bike shop during “retirement.” Maybe your passion is animals; my wife took a job at a humane society for far less than she made in other places. Or your family (whatever “family” is to you). Or maybe it’s travel. Or volunteering. Or maybe all of the above. Whatever your passions are, find them.


Most people aren’t great planners, and it’s not necessary to be. But you don’t go from dreams to reality without a plan. This step is where you begin to take make it happen.

Research. Maybe you want to move to the mountains. In the planning stage, you simply start looking at mountain towns, finding out how much they cost to live in, what the pros and cons are. Take a trip to a potential location. Or maybe you want a new career that gives you more free time or makes you more fulfilled (or both). Find out what the steps are to get into that field. Talk to some people in the field. Maybe volunteer or take an internship. Or explore the education that may be required or helpful. Planning can feel a lot like work. But it’s work you’re doing that can pay off big-time.

One thing to remember is to stay flexible. There’s an old Yiddish saying: Man plans and God laughs. Or, even better, Mike Tyson’s great line that, “Everyone has a plan until they get punched in the mouth.” Your plan may need to be revised. In fact, it WILL need to be revised. Likely more than a few times.

If you get to stuck on a plan that starts to look less feasible, reassess. My wife and I started to plan to move to San Francisco, but things quickly began to fall apart. Rather than stubbornly cling to a plan that wasn’t coming together, we regrouped. We ended up in San Diego (and frankly feel like we dodged a bullet).


Some people have a keen idea of where their money goes. Most don’t, and most don’t even want to look. But do it. Track your expenses carefully for a month or two, and see where the cash is going. You will need this skill later. (Credit card statements are pretty handy for this; some people recommend cutting up your credit cards, and if you’re a little too free with the plastic, do it. But you should be just as disciplined with them as with cash, and if you’re a “points guy,” they can come in handy.)

  • Not only do you have to budget for where you are, but for where you want to be. If it’s a new place, know what the cost-of-living will be (and always err on the high side). If it’s a new job, know what the pay is likely to be.
  • Find your number. How much of a combo of savings and salary will you need to execute the plan? Each time we made a big change, we estimated the bare minimum we’d need to get by, and then tried to double it.
  • Build in a buffer. And make it a BIG buffer. We planned to spend $30k refurbishing our first house by the ocean. It took $60k, and that was with us doing as much ourselves as we reasonably could. If you’re in a dual-income situation, I always suggest only counting on one salary to cover basic costs. If you’re relying on savings, think about how long you can last at double your planned burn rate.


Save hard. I know, every financial guru says this. But it really is the key to being able build up enough money to shape your life in the way you want. There are two halves to upping your savings: earning more and spending less. Many F.I.R.E. enthusiasts have side hustles that bring in extra cash, and if you’re motivated enough to do that, especially if it’s something you enjoy, go for it and get that extra money. But if you have a decent salary, I think it’s better to focus on spending less, as that’s going to a critical skill once you start working less or stop working entirely.

  • Start Slashing – Of course skipping the daily latte or the gym membership is the easy part. And for some lucky people, just focusing on stopping the stupid purchases that don’t really add value will make a difference. But most people need to cut deeper, and it’s good practice for when your income falls. A cheaper car. A smaller living space. Fewer splurges.
  • The Balancing Act – I know I talked about firewalking earlier, but let’s switch to the tightrope. The key is to balance the things that give you pleasure now, with the long-term goal. One trick is to know your hourly wage think about how long you have to work to make every purchase. Are you willing to delay your freedom by a couple hours to have that nice restaurant lunch versus eating something from home?
  • Get It For Less – I am bad at going without (much worse at it than my wife). But I am a practiced bargain hunter, and it’s a skill that you need. One way to get the gadget or vacation you want for less is to bargain or wait for a sale. Patience is a great skill, and waiting for the right time to buy a phone or book a trip is a great teacher. But another tip is to get almost what you want for a fraction of the price. You can buy it used, or you can buy a level or two down, or you can go in the shoulder season. (One has to be careful not to get scammed when bargain shopping, but being vigilant with your money is also a necessary skill.)
  • Nobody Cares – I have noticed a reluctance to be aggressive about saving money among some people because it can make you “look cheap.” Some people just feel it’s embarrassing to buy generic or shop a thrift store. Here’s a reality check for you: nobody cares. Everyone is wrapped up in their own lives, and if they’re thinking about you at all, they’re probably thinking that you’re clever and financially savvy for saving money and working toward your future. And if someone you know is the type who is impressed with a shiny new car or fancy jewelry, they will probably be even more impressed in a few years when you’re spending the day at the park with your kids while they’re scurrying off to work in rush hour.
  • Reduce Debt – Some debt, like student loans and mortgages aren’t too burdensome, and can have tax benefits. But credit card debt, any personal loans, anything that carries a high interest rate: Get rid of it ASAP. You still should be saving, but put about half of your extra cash monthly toward debt reduction. And don’t be afraid to ask lenders for reduced interest rates or more lenient repayment plans; communicating with debtors is vastly preferable to avoiding them.
  • Save Smart – The final piece is to put your savings to work. While a million books have been written about investing, for our purposes, the place to save smart is the stock market. There is an element of risk to the stock market, as the value of stocks can fluctuate wildly. But over the long term, the stock market, broadly defined, is your best bet. You won’t be a stock picking genius (no one is). Buy no-load mutual funds that are indexed to the S&P 500 or another broad index. And once you have bought the funds, hold tight; the market drops are scary, but selling low is a terrible idea. Wait out the month-to-month fluctuations, as the trend over the years has always been positive.
  • Get on The Property Ladder – I am hesitant to recommend viewing your home as an investment (it’s mostly just a place to live), but in certain circumstances it can be a good wealth builder. And it has been for most American families. This is a much longer topic, but in short: Tread carefully, and buy as low as you can.

Everyone Has a Dream

But dreams stay dreams until you make a plan. Once you imagine a vision of how you want to live, you have to plan to make it happen. Then you have to do the math with a budget. Finally, you do the work of saving (actually, I hope you’ve been doing that all along). Your dreams can be a reality. At Dollar Peak, we want to help.