Guinea Pig Experiment

Welcome to the Guinea Pig experiment, the experiment where we watch the entire journey of someone going from $0 to financial independence!

In this experiment, we follow two different scenarios – one baseline scenario and one optimized scenario. The baseline scenario invests all savings into a taxable investment account and the optimized scenario utilizes some of the advanced strategies I write about here.

For example, the optimized scenario:

Comparing these two scenarios will allow us to see how many years earlier someone could retire if the strategies and tactics discussed on this site are applied in real life!

This page serves as the main hub for the experiment and will be kept up-to-date with the progress of the Guinea Pigs throughout their journeys.

To read the past annual updates for the Guinea Pig series, visit the Archives page.

Graphs

Here are the FI Laboratory graphs for the two Guinea Pig scenarios, showing their progress from the start of the experiment (January 1st, 2014) to the most-recent monthly update (September 1st, 2016).

The FI Laboratory is a web application I created that allows you to easily chart your progress to financial independence, as recommended in the classic book on financial independence – Your Money or Your Life.

If you haven’t started charting your own progress yet, sign up for a free Personal Capital account to automatically calculate your net worth, monthly spending, etc. and then plug those numbers into the FI Laboratory to see if you can keep up with the Guinea Pigs!

Normal Scenario

Normal GP - Aug 2016

Optimized Scenario

Optimized GP - Aug 2016

Net Worth Values

  • Normal Scenario: $87,315
  • Optimized Scenario: $115,918

Experiment Assumptions

Both guinea pigs are single (with no kids), live in income-tax-free states, invest all money into Vanguard’s Total Stock Market ETF (VTI), and adhere to the following numbers that Mad Fientist readers voted on at the beginning of the experiment (numbers are adjusted annually for inflation/raises/etc.):

  • Pre-tax Income: $76,608 ($6,384 per month)
  • Spending: $27,012 ($2,251 per month)
  • Employer 401(k) Match: 3%

Contributions

Here’s where the Guinea Pigs’ money went every month:

Normal Scenario

Date Income FICA Taxes Federal Income Taxes Spending Taxable Investments Reinvested Dividends Total Invested
Aug 2016 $6,384 $488 $1,028 $2,251 $2,616 $0 $2,616
Jul 2016 $6,384 $488 $1,028 $2,251 $2,616 $0 $2,616
Jun 2016 $6,384 $488 $1,028 $2,251 $2,616 $282 $2,899
May 2016 $6,384 $488 $1,028 $2,251 $2,616 $0 $2,616
Apr 2016 $6,384 $488 $1,028 $2,251 $2,616 $0 $2,616
Mar 2016 $6,384 $488 $1,028 $2,251 $2,616 $257 $2,874
Feb 2016 $6,384 $488 $1,028 $2,251 $2,616 $0 $2,616
Jan 2016 $6,384 $488 $1,028 $2,251 $2,616 $0 $2,616
Dec 2015 $6,174 $472 $978 $2,236 $2,488 $273 $2,761
Nov 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Oct 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Sep 2015 $6,174 $472 $978 $2,236 $2,488 $206 $2,694
Aug 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Jul 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Jun 2015 $6,174 $472 $978 $2,236 $2,488 $161 $2,649
May 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Apr 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Mar 2015 $6,174 $472 $978 $2,236 $2,488 $145 $2,632
Feb 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Jan 2015 $6,174 $472 $978 $2,236 $2,488 $0 $2,488
Dec 2014 $6,000 $459 $943 $2,200 $2,398 $126 $2,524
Nov 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Oct 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Sep 2014 $6,000 $459 $943 $2,200 $2,398 $77 $2,474
Aug 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Jul 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Jun 2014 $6,000 $459 $943 $2,200 $2,398 $44 $2,442
May 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Apr 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Mar 2014 $6,000 $459 $943 $2,200 $2,398 $18 $2,416
Feb 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398
Jan 2014 $6,000 $459 $943 $2,200 $2,398 $0 $2,398

Optimized Scenario

Date Income FICA Taxes Federal Income Taxes Spend 401(k) 401(k) Match HSA Trad. IRA Taxable Dividends Total
Aug 2016 $6,384 $488 $333 $2,251 $3,042 $192 $0 $0 $269 $0 $3,503
Jul 2016 $6,384 $488 $286 $2,251 $3,358 $192 $0 $0 $0 $0 $3,550
Jun 2016 $6,384 $488 $286 $2,251 $3,358 $192 $0 $0 $0 $426 $3,976
May 2016 $6,384 $488 $286 $2,251 $3,358 $192 $0 $0 $0 $0 $3,550
Apr 2016 $6,384 $488 $286 $2,251 $3,358 $192 $0 $0 $0 $0 $3,550
Mar 2016 $6,384 $488 $286 $2,251 $1,142 $192 $0 $2,216 $0 $386 $3,936
Feb 2016 $6,384 $488 $286 $2,251 $192 $192 $0 $3,166 $0 $0 $3,550
Jan 2016 $6,384 $232 $241 $2,251 $192 $192 $3,350 $118 $0 $0 $3,851
Dec 2015 $6,174 $472 $161 $2,236 $185 $185 $0 $0 $3,120 $406 $3,896
Nov 2015 $6,174 $472 $932 $2,236 $185 $185 $0 $0 $2,349 $0 $2,719
Oct 2015 $6,174 $472 $932 $2,236 $185 $185 $0 $0 $2,349 $0 $2,719
Sep 2015 $6,174 $472 $850 $2,236 $515 $185 $0 $0 $2,101 $317 $3,119
Aug 2015 $6,174 $472 $281 $2,236 $3,185 $185 $0 $0 $0 $0 $3,370
Jul 2015 $6,174 $472 $281 $2,236 $3,185 $185 $0 $0 $0 $0 $3,370
Jun 2015 $6,174 $472 $281 $2,236 $3,185 $185 $0 $0 $0 $246 $3,616
May 2015 $6,174 $472 $281 $2,236 $3,185 $185 $0 $0 $0 $0 $3,370
Apr 2015 $6,174 $472 $281 $2,236 $3,185 $185 $0 $0 $0 $0 $3,370
Mar 2015 $6,174 $472 $281 $2,236 $185 $185 $0 $2,550 $0 $218 $3,589
Feb 2015 $6,174 $468 $281 $2,236 $185 $185 $54 $2,950 $1 $0 $3,375
Jan 2015 $6,174 $220 $237 $2,236 $185 $185 $3,296 $0 $0 $0 $3,667
Dec 2014 $6,000 $459 $215 $2,200 $180 $180 $0 $0 $2,946 $188 $3,494
Nov 2014 $6,000 $459 $898 $2,200 $180 $180 $0 $0 $2,263 $0 $2,623
Oct 2014 $6,000 $459 $898 $2,200 $180 $180 $0 $0 $2,263 $0 $2,623
Sep 2014 $6,000 $459 $708 $2,200 $180 $180 $0 $762 $1,691 $124 $2,937
Aug 2014 $6,000 $459 $276 $2,200 $180 $180 $0 $2,885 $0 $0 $3,245
Jul 2014 $6,000 $459 $276 $2,200 $1,212 $180 $0 $1,853 $0 $0 $3,245
Jun 2014 $6,000 $459 $276 $2,200 $3,065 $180 $0 $0 $0 $71 $3,317
May 2014 $6,000 $459 $276 $2,200 $3,065 $180 $0 $0 $0 $0 $3,245
Apr 2014 $6,000 $459 $276 $2,200 $3,065 $180 $0 $0 $0 $0 $3,245
Mar 2014 $6,000 $459 $276 $2,200 $3,065 $180 $0 $0 $0 $30 $3,275
Feb 2014 $6,000 $455 $275 $2,200 $3,020 $180 $50 $0 $0 $0 $3,250
Jan 2014 $6,000 $210 $232 $2,200 $108 $180 $3,250 $0 $0 $0 $3,538

Investments

Here’s a monthly look inside the Guinea Pigs’ portfolios:

Normal Scenario

Date VTI Share Price Taxable VTI Taxable Cash Total Portfolio Value
Aug 2016 $111.65 $87,310 $5 $87,315
Jul 2016 $111.42 $84,456 $68 $84,525
Jun 2016 $107.16 $78,763 $15 $78,777
May 2016 $107.34 $75,997 $9 $76,006
Apr 2016 $105.51 $72,063 $77 $72,140
Mar 2016 $104.82 $68,972 $98 $69,070
Feb 2016 $98.32 $62,040 $54 $62,094
Jan 2016 $98.33 $59,391 $93 $59,484
Dec 2015 $104.31 $60,291 $33 $60,324
Nov 2015 $107.17 $59,051 $89 $59,140
Oct 2015 $106.53 $56,248 $66 $56,314
Sep 2015 $98.72 $49,854 $29 $49,882
Aug 2015 $102.21 $48,754 $99 $48,853
Jul 2015 $108.84 $49,305 $65 $49,369
Jun 2015 $107.02 $46,019 $80 $46,099
May 2015 $109.31 $44,271 $107 $44,378
Apr 2015 $107.91 $41,330 $24 $41,354
Mar 2015 $107.25 $38,610 $19 $38,629
Feb 2015 $109.02 $36,522 $67 $36,589
Jan 2015 $103.10 $32,167 $87 $32,254
Dec 2014 $106.00 $30,528 $74 $30,602
Nov 2014 $106.60 $28,142 $95 $28,237
Oct 2014 $104.02 $25,173 $42 $25,215
Sep 2014 $101.24 $22,172 $37 $22,208
Aug 2014 $103.88 $20,153 $93 $20,246
Jul 2014 $99.74 $17,056 $85 $17,140
Jun 2014 $101.77 $14,960 $81 $15,041
May 2014 $99.62 $12,253 $81 $12,335
Apr 2014 $97.53 $9,655 $75 $9,730
Mar 2014 $97.47 $7,310 $18 $7,328
Feb 2014 $97.40 $4,870 $39 $4,909
Jan 2014 $92.88 $2,322 $76 $2,398

Optimized Scenario

Date VTI Share Price HSA VTI HSA Cash 401(k) VTI 401(k) Cash IRA VTI IRA Cash Taxable VTI Taxable Cash Total Portfolio Value
Aug 2016 $111.65 $11,612 $89 $64,869 $98 $18,199 $0 $20,990 $61 $115,918
Jul 2016 $111.42 $11,588 $89 $61,504 $102 $18,161 $0 $20,724 $15 $112,184
Jun 2016 $107.16 $11,145 $89 $55,830 $7 $17,467 $0 $19,932 $15 $104,485
May 2016 $107.34 $11,163 $40 $52,060 $88 $17,389 $32 $19,858 $48 $100,678
Apr 2016 $105.51 $10,973 $40 $47,691 $80 $17,093 $32 $19,519 $47 $95,475
Mar 2016 $104.82 $10,901 $40 $43,920 $13 $16,981 $32 $19,392 $47 $91,325
Feb 2016 $98.32 $10,127 $96 $39,721 $57 $13,765 $54 $18,091 $76 $81,988
Jan 2016 $98.33 $10,128 $96 $39,332 $67 $10,620 $35 $18,093 $76 $78,446
Dec 2015 $104.31 $7,197 $89 $41,307 $77 $11,161 $15 $19,193 $76 $79,115
Nov 2015 $107.17 $7,395 $49 $41,903 $0 $11,360 $58 $16,504 $9 $77,278
Oct 2015 $106.53 $7,351 $49 $41,227 $59 $11,292 $58 $14,062 $17 $74,115
Sep 2015 $98.72 $6,812 $49 $37,908 $8 $10,464 $58 $10,859 $12 $66,171
Aug 2015 $102.21 $7,052 $14 $38,329 $6 $10,834 $4 $8,994 $45 $65,278
Jul 2015 $108.84 $7,510 $14 $37,223 $9 $11,537 $4 $9,578 $45 $65,919
Jun 2015 $107.02 $7,384 $14 $33,283 $12 $11,344 $4 $9,418 $45 $61,505
May 2015 $109.31 $7,433 $89 $30,388 $44 $11,478 $62 $9,619 $10 $59,123
Apr 2015 $107.91 $7,338 $89 $26,654 $62 $11,331 $62 $9,496 $10 $55,041
Mar 2015 $107.25 $7,293 $89 $23,166 $37 $11,261 $62 $9,438 $10 $51,357
Feb 2015 $109.02 $7,413 $55 $22,567 $77 $8,831 $44 $9,485 $80 $48,552
Jan 2015 $103.10 $7,011 $1 $21,032 $34 $5,567 $38 $8,970 $79 $42,732
Dec 2014 $106.00 $3,816 $4 $21,200 $76 $5,724 $38 $9,222 $79 $40,159
Nov 2014 $106.60 $3,731 $90 $20,894 $30 $5,756 $8 $6,289 $73 $36,871
Oct 2014 $104.02 $3,641 $90 $19,972 $97 $5,617 $8 $3,953 $48 $33,425
Sep 2014 $101.24 $3,543 $90 $19,134 $49 $5,467 $8 $1,620 $74 $29,985
Aug 2014 $103.88 $3,636 $74 $19,218 $8 $4,778 $34 $0 $3 $27,751
Jul 2014 $99.74 $3,491 $74 $18,053 $63 $1,795 $58 $0 $2 $23,536
Jun 2014 $101.77 $3,562 $74 $16,996 $67 $0 $0 $0 $2 $20,701
May 2014 $99.62 $3,487 $59 $13,449 $22 $0 $0 $0 $1 $17,019
Apr 2014 $97.53 $3,414 $59 $9,948 $65 $0 $0 $0 $1 $13,487
Mar 2014 $97.47 $3,411 $59 $6,725 $38 $0 $0 $0 $0 $10,235
Feb 2014 $97.40 $3,409 $45 $3,409 $93 $0 $0 $0 $0 $6,955
Jan 2014 $92.88 $3,158 $92 $279 $9 $0 $0 $0 $0 $3,538



Check back at the beginning of every month for the latest Guinea Pig numbers and graphs! And if you haven’t already, sign up here for a free FI Laboratory account to start tracking your own progress to financial independence!

13 comments for “Guinea Pig Experiment

  1. Robert Batts
    July 9, 2015 at 7:25 pm

    I understand the frontload concept but how do you do it on a biweekly salary?

    • Chinmay
      August 12, 2015 at 10:15 am

      Robert,

      The concept would be to put as much money as you can from your salary in the first few months towards the tax advantaged account. If you go through the experiments update, you would see that the optimized GP diverts his/ her salary to different accounts over the year. First it is HSA, than IRA and than 401K.

      If you are just starting, it’s understood that you don’t have that much spare cash lying around to front load in Jan.

      Hope this helps.

      Best Regards,
      Chinmay

    • Tim
      December 11, 2015 at 4:56 pm

      I don’t understand it… If the Market ALWAYS went up then I get it… BUT it does have a lot of short term fluctuations… 2 times now the cost basis for the market has been lower than it was the beginning of the year… So why would I want to dump it all in first part of the year… when if I hold it.. I get opportunities to buy at a lower cost basis later in the year? Of course I want to buy lower that is instant value is it not?

      • Mike Lane
        January 11, 2016 at 12:37 pm

        You’re proposing that you can time the market, and you’ll know when the low points of the market are. How do you know Jan 1st is not the lowest point for the remainder of the year? If you front load every year, you’re really dollar cost averaging over a long period of time.

        • Tim
          January 11, 2016 at 3:17 pm

          No one knows if Jan 1st or any day will be a lowest or highest in any given year… but I can say with certainty that the market will experience a lot of volatility again in the current and coming future… using the volatility over the long haul allows for someone to take advantage of buying opportunities along the way. It seems prudent to me.

  2. Mike
    July 10, 2015 at 8:37 pm

    The Guinea Pig series, more than anything else any other financial person has written, has helped me figure out how I can retire before the age of 60 (I’m 45 now) even though my 401(k) currently sits at a piddly $6K!

    I’m not a great numbers guy, and this process has always stymied me a bit. but seeing it all broken out like this, and especially seeing the difference between the two approaches, has been all I needed to put my own plan in place.

    I’ve spent the past couple of years downsizing my life, my monthly expenditures, and my desire for “things”. I’ll be 100% debt free by the end of the year. Starting in January 2016, I should be able to follow the Optimized plan almost to the letter (except for the darn state income taxes – but I have other advantages that make up for that – primarily a supplemental pension plan, and almost no transportation costs since I’m a telecommuter).

    I’m so excited to get started. It won’t be the “mega-early retirement” that many of the FI blogs espouse, but I’ll be able to retire somewhere in the 55-59 range – depending on a few variables that should be settled by the end of the year.

    It may not sound all that exciting, but when I was previously facing the scenario of having to work until age 70, combined with the knowledge that my dad passed away at age 68, and his dad at age 71, I’ve at least dramatically reduced the odds of literally working until I die!! ;-)

    Thanks again for the amazing knowledge you share here.

    • Dan
      July 13, 2016 at 11:17 am

      More than a year late, but better late than never… good for you. I just wanted to say that I found this to be an inspiring post and I’m rooting for you. Hope things are going well.

  3. Clementine
    July 12, 2015 at 12:29 pm

    I was wondering the same thing, Robert!

  4. Jose G
    August 10, 2015 at 12:06 am

    Our company does not have the option of the HSA and current salary would disqualify me from contributing into a traditional IRA after maxing out my 401K. Also, our 401k has limited mutual funds option, no VTI, and no dividends. Whereas the after tax contribution has so much choices as far as investments are concern. I am a dividend investor, long term holding, so I’m not sure that the optimize porforlio could really outperform a dividend growth porfolio that is contiously compounding with dividend reinvestment. Its true that the optimize will have the advantage of being able to invest the deferred tax, but is it sufficient to outperform with all the fees in the mutual fund and only able to invest in a fund that mimicks the s&p500.

  5. Adam
    September 3, 2015 at 3:42 pm

    Is there any reason you chose to max out the 401k first last year, but the Traditional IRA first this year? Just for simplicity?
    I guess it doesn’t really matter since you’ll be maxing them all out, but in real life if you maxed the IRA first and then something came up that prevented you from maxing the 401k, you’d have a higher AGI and possibly more tax depending on your income. The GP’s income is known and isn’t high enough to worry about the IRA deduction being phased out (as long as all of this saving is happening, that is), but if it were unknown or high enough, you could screw yourself by not maxing the 401k first, right?

  6. wouldlike2startinvesting...
    October 6, 2015 at 3:46 pm

    Under the “Contributions–>Optimized Scenario–>”, if I total all the contributions from the following columns (401K + Match + HSA + IRA + Taxable + Dividends” from Jan ’14 to Sept ’15, I am getting $68,429. I compared this value to “Investments –> Optimized Scenario–>, and the portfolio value is at $66,171 (as of Sept ’15)

    If I started buying stocks/funds beginning of this year, I don’t see how my money is working for me since what I have contributed this year is less than the portfolio. Did I read the ‘contributions chart’ correctly, or am I not supposed to add one of the columns I listed above?

    Thank you.

    • DAK
      October 9, 2015 at 12:11 am

      I think there are a couple of things going on here, but am not 100% sure:

      1) You should exclude dividends from contributions – they are only the result of your money for you. Here they total ~$1.2k, reducing total contributions to $67.2k
      2) VTI share price has fluctuated over time. In this case it was highest (107-109) when Guinea Pig was frontloading IRA contributions at the start of 2015, and has since declined. So Guinea Pig’s 2015 IRA contributions have lost money over the course of the year.

      I think this illustrates two great points:
      1) Even with the loss from front loading, optimized portfolio is still way ahead in net worth
      2) We know that sometimes there is some loss from front loading, but over the long run it will wash out, Guinea Pig should help demonstrate this.

      When you invest in stocks (including the many contained in VTI), the value will go up and down. Pick a month at random and you may have realized a loss, but over the long run it is expected to go up. As a counter example, take a look at December 2014 – at that time Guinea Pig was well up thanks to frontloading and GP’s money working for her/him

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