Gandalf set out from the house of the gods, Valinor, to help staive off the threat of evil, namely Sauron. Over 60 years after the defeat of Sauron, Gandalf was called upon once more by a band of dwarves to aid their quest to reclaim their homeland. Sensing a darker power at work, Gandalf manipulated events so the band of dwarves would successfully reach Erebor (by hiring, rather unwittingly, the perfect burgular), and he himself would be seperated from them, investigating the growing evil that was re-entering this world. Smaug, the terrible Fire Drake, was defeated, and all was going according to plan for Gandalf. Smaug would have been enticed most definitely by the power of the Ring (he was in the brief spat of wit with Bilbo in Thror's gold hoard), and would've been used to terrible effect against Gandalf's side. In killing Smaug, not only would he remove a possible tool in Sauron's arsenal, but he would restore two great kingdoms allied to his cause. It was a win-win situation. Even to the very end Gandalf's plans were in motion. To further his own destructive powers and to defeat another strong enemy that would've sided with Sauron, Gandalf slew the Balrog on Durin's Tower on the peak of Zirakzagil, and was reborn as Gandalf the White.

On one side, Gandalf was a party-goer, smoker, and enjoyer of the finer things of life, while on the other hand, he was a master strategist and powerful sorcerer, and a valuable asset to the cause of the Free Peoples of Middle Earth.