A financially independent couple with 2 kids shares how they both retired by 35 and haven't returned to the office since

• Sam Dogen retired at 34 in San Francisco with over $3 million after 13 years of saving and investing.
• His wife retired at 35, and both haven't held a 9-to-5 job since the mid-2010s.

Sam Dogen went from starting his career 25 years ago making $40,000 a year in New York City to retiring in San Francisco 13 years later with a net worth of over $3 million. His wife retired three years after him at age 35.

For years, the two saved most of their income, poured money into passive investments, and worked long hours to achieve financial independence — the point at which they wouldn't need to work to cover their long-term expenses.

"It's really a journey of balancing your finances, figuring out passive incomes, covering your expenses, buying the things that you want that'll improve quality life like a house, and then also being willing to go back to work in either part-time or full-time capacity once you have that void to fill," Dogen said.

Dogen and his wife are FIREs — financial independence, retire early — who make it work with two kids in one of the US's most expensive cities. He said it's uncommon for both people in a couple to reach FIRE at around the same time. Raising their kids has been a full-time job for both of them, but both have found peace in pursuing — and monetizing — their passions while relying on passive income to fund their vacations and entertainment.

In a way, both have rejected the "RE" in the FIRE acronym, though neither plans to return to an office job.

Discovering FIRE

In 1999, Dogen got his first job in investment banking in New York City, making $40,000 and splitting a studio apartment with a roommate to save money. He said he would work late to get free cafeteria food, which he saved for the next day, meaning he rarely spent on groceries.

"I figured if I could save 100% of every other paycheck, that would be saving 50% of my salary, and every year I saved 50% of my salary was one year of living," Dogen said. "I took it a step further: I saved every other paycheck, and I saved and invested 90% of any discretionary year-end bonus. I did that essentially for 13 years in a row."

He moved to San Francisco for another position and rose through the ranks throughout the 2000s. In 2003, he bought a two-bedroom condominium, which allowed him to fix his living expenses for the next few years. He said this was one of the keys to achieving financial independence.

However, in 2009, he estimates he lost 35% to 40% of his net worth in six months. That year, he started his blog, Financial Samurai, chronicling his journey to financial independence while continuing at his company and rebuilding some of his net worth. But, after surviving seven rounds of layoffs, he realized he had enough in the bank to quit his $250,000-a-year job without rushing to another job.

"I realized that after 10 years, I wasn't having any fun anymore," Dogen said. "It's very stressful, and I wanted out, but I didn't know how to get out because I just didn't plan that far."

He negotiated a severance package in 2012, which allowed him to keep his deferred stock and cash compensation. At the time, his net worth was $3 million, and he had saved between 75% and 80% of his income over the previous few years.

"I never let lifestyle inflation get to me, and I was driving old cars, living in very humble homes," he said.

Transitioning into early retirement

Though he had a large nest egg and passive investments, he wondered for a few years if he had made the right choice. His wife made $120,000 a year, but he was unsure if his retirement would only be temporary. Still, his health improved shortly after quitting, and he realized how much pressure he had been under that was lifted off his shoulders.

"I was like, what am I doing? I'm only 35 years old, leaving a well-paid job behind, losing so much money," Dogen said. "But as the months went by, I felt more calm because I had way more freedom, and I was happier. The chronic back pain and sciatica and teeth grinding went away within six months."

Early in his career, he knew he wanted to achieve financial independence and retire early, but he didn't want to leave the city. He said it's rare for people who reach FIRE to live in expensive coastal cities, noting many move to suburbs or more rural areas where the cost of living is lower. He knows couples making well into the six figures who struggle to save between housing and raising children.

"If you plan to stay in a high-cost-of-living area and you want to FIRE, you have to focus on ways to build wealth that outstrip the cost of living," Dogen said.

In addition to the income he earned from his blog, he poured money into stocks and real estate. He also followed various budgeting guidelines like spending no more than 10% of gross income on cars. He follows a 30% rule for homebuying as well.

"I feel like there's this whole world out there who just kind of wing it when it comes to their personal finances, and then they wake up 10 years later and wonder where all their money went because there aren't disciplines or ratios or guidelines that they follow," Dogen said.

When he retired, he told his wife that if she could stay in her job for three more years until she turned 35, both could retire early and still make enough in passive income to live comfortably. They upped their savings rate and tried to maximize passive income during those years.

"One of the interesting phenomena you'll see in the FIRE space is how a man will proclaim he's retired early, but he'll have a working wife," Dogen said. "It's a head-scratcher because I don't know a single stay-at-home mom who says she's retired early. She just says she's a stay-at-home mom because it's a full-time job. It's crazy how much work it is."

In 2015, his wife also negotiated a generous severance package after her company tried to keep her working part-time. She returned to the company after a few months, making more in a part-time position than she did working full-time. She stopped in 2016, shortly before having their first child.

"It's really methodically saving and investing as much as possible for as long as possible," Dogen said. "Too many people get in credit card debt, buying things they don't need, expensive vacations."

Are you part of the FIRE movement or living by some of its principles? Reach out to this reporter at nsheidlower@businessinsider.com.