If you are going to achieve FIRE, you need a solid plan. Here is an example of how NOT to go about a plan. Step 1 – decide to retire early. Step 2 – save every penny you can. Then – live a miserable life in hopes that one day you can enjoy something because you saved a bunch of money. This is definitely not a good way to plan on reaching your FIRE goal.

Prior to running the company I’m with now, my background was in continuous improvement and project management. One tool I used constantly then (and still do now) is the S.M.A.R.T. acronym. If you’re not familiar with it, here is what the letters stand for (in the version I use).

S = Specific

M = Measurable

A = Agreed

R = Realistic

T = Time-bound

Let me

show you how to put this to good use. For some, the goal might be something along the lines of, “I want to be rich by the time I’m 50”. For others, it might sound a little like, “I want to quit my job and never work again”. In both examples, key components are lacking. For example, what does rich mean? Is it one million dollars in the bank or two? Does quit my job mean that next year I quit or in twenty years I quit?

This is what I did: By the age of 45, I want to be mortgage free while having amassed enough investable assets to generate monthly revenue to cover $5,000 of expenses.

smart plan


S = Specific = By the age of 45 (9 years down the road at the time), mortgage free, and covering $5,000 per month of expenses.

M = Measurable = mortgage will equal $0, $5,000 per month of expenses equals $60,000 per year. Assuming a 4.5% rate of return on investments, that means I need to have $1,333,333 in investable assets by the time I’m 45.

A = Agreed = to get our mortgage to $0 and have over $1.3m in the bank, my wife and I needed to have a chat and agree that our lifestyle would be fulfilling for our family day in and day out for the next nine years while we worked on hitting these goals. Fortunately, we’re both frugal (not cheap) and were agreeable to the way we needed to move forward (things like not buying the big house, sticking to a vacation budget each year, etc.).

R = Realistic = Can we pay off a 30-year mortgage in 9 years while saving over a million dollars? Time will tell but looking at our income and expenses, it wasn’t out of the realm of possibility.

T = Time-bound = by the age of 45. Nine years to reach FIRE. While that sounds pretty short, when I think about the last month at work, it seems like an eternity. Sticking to something for nine years is very, very challenging.


you can see how S.M.A.R.T. goals can help you set a solid plan. It may take you a few attempts to get this right. I can’t tell you how many people I’ve coached over the years struggle with the S.M.A.R.T. concept. People are comfortable using terms like too much, too many, more, a lot, and so on. That’s not good enough. For one person, $500,000 saved in the next 5 years might be enough to reach FIRE. For another, it might be $2,000,000 over the next 15 years. Whatever your case, use this planning tool to make sure you are laser focused.

With a plan nailed down, next comes one of the most difficult transitions you’ll encounter on your path to FIRE. Mindset.

Or, head back to all Six Steps.