How to Achieve Financial Independence Two Years Earlier

Guinea Pig Experiment

I can’t believe it but it’s already time for the second annual update of the Guinea Pig Experiment!

The Guinea Pig experiment follows two people with identical income and spending on their journey to financial independence, using real-time decision-making and market returns.

The only difference between the two scenarios is that one of the guinea pigs (Optimized GP) uses the strategies and tactics I write about here and the other one (Normal GP) doesn’t. As you’re about to see, these optimizations make a huge difference!

To check out past articles in the series, visit the Archives page. To see the latest Guinea Pig numbers at any point during the year, head over to the Guinea Pig Experiment homepage!

Year Two Summary

After just two years of investing, the Optimized GP has $18,791 more than the Normal GP ($79,115 vs. $60,324), even though both spent the same amount of money, invested in the exact same ETF, and had the same income!

To put it another way, the Optimized GP increased his net worth by over 31% just by utilizing the tax-avoidance strategies described below!

Not only does the Optimized GP have more money, he’s going to be able to retire over two years earlier than the Normal GP!


Here are the FI Laboratory graphs for the two scenarios.

If you haven’t started tracking 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 - Year 2

The Normal GP continued to save diligently and has built up a portfolio that could provide over $200 of passive income every month, potentially for the rest of his life!

Optimized Scenario

Optimized GP - Year 2

The Optimized GP obviously did even better. He will reach financial independence two years and three months sooner than the Normal GP and has already built up a portfolio that could provide over $260 per month!


Since I record all of this information in a custom spreadsheet, I’m able to calculate how much each of the strategies utilized by the Optimized GP affected the total returns.

Bonus: If you want to use a similar spreadsheet on your own journey, click here to get a copy of the custom spreadsheet I used during my pursuit of financial independence!

Let’s take a look at how this 31% increase was actually achieved…

401(k) Match

The first thing that the Optimized GP did was take advantage of his employer’s 3% 401(k) match.

This one move resulted in an additional $5,079 over two years for the Optimized GP, or an additional 8.42%!

Biggest takeaway: No matter what is happening in your life, find a way to at least contribute enough to your 401(k) to get the employer match!

401(k) Max

The Optimized GP also decided to max out the rest of his 401(k).

If you’re thinking to yourself that maxing out the 401(k) is a stupid move since the GP will need to access that money long before traditional retirement age, check out this post to learn about some great strategies that early retirees can use to tap into that money early without paying any fees (or taxes, potentially).

This decision resulted in an extra $7,994 by the end of year two, or an extra 13.25%!

Health Savings Account

After reading my Ultimate Retirement Account article, the Optimized GP also decided to max out his Health Savings Account again this year.

Contributing to his HSA resulted in an additional $2,031 (or 3.37%) over the past two years.

Traditional IRA

Thanks to my Traditional IRA vs. Roth IRA article, the Optimized GP decided to max out his Traditional IRA as well.

This move resulted in an extra $2,804 (4.65%) by the end of year two.


As I described in my Front-Loading article, it makes sense to max out your retirement accounts during the beginning of the year so that your tax savings have more time to grow. This won’t be beneficial every year but since the market’s long-term trend is up, it’s beneficial more often than it’s not so it’s a good long-term strategy.

Since the market was higher at the beginning of 2015 and then took a dive in the autumn, front-loading probably cost the Optimized GP some tax-loss harvesting opportunities in 2015 but overall the strategy has been beneficial because it’s resulted in an extra $883 (1.46%) over the first two years of the experiment.


Thanks to these smart tax-avoidance moves, the Optimized GP paid $6,918 less in taxes in 2015 than the Normal GP.

Guinea Pig - Year 2 Taxes


These tax savings, combined with the employer 401(k) match and the additional dividends received, resulted in $8,759 worth of extra investment contributions during the year for the Optimized GP!

Guinea Pig - Year 2 Contributions


Another great year for the guinea pigs, especially the Optimized GP!

With the crazy start to 2016, I’m hoping to do some tax-loss harvesting and other fun stuff with the Optimized GP this year so to stay up-to-date with these real-time decisions, follow me on Twitter and Facebook!

To keep an eye on the experiment’s monthly investment summaries, check out the Guinea Pig Experiment homepage (which gets updated at the beginning of every month).

How About You?

How did your numbers compare to the Optimized GP’s in 2015?

Were your FI Laboratory graphs as impressive?

Related Post

Want to Retire Earlier?

  1. Sign up for a free Personal Capital account to start tracking your net worth, monthly spending, etc.
  2. Enter those numbers into the FI Laboratory and begin charting your progress to financial independence
  3. Download the spreadsheet I used on my own journey to FI to determine which expenses are delaying your progress the most
  4. Reduce or eliminate those expenses to achieve financial independence even sooner!

Track Your Progress to FI!

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68 comments for “How to Achieve Financial Independence Two Years Earlier

  1. Justin @ Root of Good
    January 11, 2016 at 8:41 am

    Excellent point you have illustrated here. I hear all the time how it’s impossible to save and invest and grow wealthy from nothing more than a regular paycheck. And that if you claim to have done so in your own life, you are lying.

    But that’s because they forget about the tens of thousands of dollars in tax savings most employees can take advantage of between the 401k, IRA, and HSA, plus getting the (tax free) company match every year. And translating those savings into “years of acceleration toward FI” is a perfect way to put the awesomeness into context. :)

    • The Mad Fientist
      January 11, 2016 at 1:12 pm

      Yeah, I figured the only way to silence the naysayers was to show someone going from $0 to FI in real time so that’s what I’m doing. It will take a while (only ~9 more years to go, haha) but at least at the end of it, I’ll have all the numbers to prove it’s possible. I’m sure people will then just say it was a period of “remarkable returns” and that it “couldn’t be done in today’s market environment” but I imagine I will have stopped caring by then :)

      • Brittany
        February 23, 2016 at 3:07 pm

        I know the votes were to analyze a salary of $100,000 with 401k matching. Would you imagine that it would just take a few years longer for someone making less…say half of that, with no matching? Also, I am brand new to this site (followed some links from budgets are sexy and afford you all!), and was wondering if there was an article you could point me to that addressed paying off low interest student loan debt vs. investing in retirement? I only have my cell phone and student loans to hack before I am investing everything into FI! Thanks!

  2. Chris @ Flipping A Dollar
    January 11, 2016 at 9:39 am

    The hardest part for me is seeing the stock market so stagnant. We were putting extra money into our principal to first get out of PMI (complete) and then finished out the year. I’m now trying to justify continuing to do this but may do it on a month by month basis depending on how the stock market is doing. I know I can’t pick and choose but we put a lot into our 401k and my wife’s 457. I just dream of the days that I don’t have a mortgage. I’ve never spoken to someone who regrets paying it down. There’s something to be said about the mental positives being completely debt free.

    • Mr. FrugalInAR
      January 11, 2016 at 10:09 am

      @Chris: Paying extra on that mortgage is introducing liquidity risk. Consider a conservative investment account to hold the extra funds and payoff in a lump sum when principal owed < investment value. Rates are low enough it shouldn't be hard to out-earn but consider additional interest paid as liquidity risk insurance.

      • Chris @ Flipping A Dollar
        January 11, 2016 at 11:05 am

        Until you have enough to open a HELOC. Then the liquidity is basically gone. And right now, what do I need these funds to be liquid for? We have 3 months emergency fund, two Roth IRAs with another 6 months of principal if needed. Sure I can be eating crow if I lose my job but it’s still something to think about.

        The thing that makes it even harder is that I’m not fully funding my 401k yet, and my wife has a 457. We’ve been increasing her contributions as we go since that is not subject to a 10% penalty like a 401k is. On top of all of that she also has a 401k so we could theoretically be putting way 54k per year pre-tax if it weren’t for the darned rascals.

        Either way, you’re right. There are options out there and this one has my wife on board as opposed to just increasing retirement contributions.

        In the end, it’s like choosing the better of two really good options. Neither is bad in itself, while one has been slightly better historically.

        • The Mad Fientist
          January 11, 2016 at 1:19 pm

          Someone on Twitter just congratulated me for having such civil comments on my posts. I realize I’m very lucky in that respect so thanks for having interesting discussions that I enjoy reading and for being respectful at the same time. Mad Fientist readers really are the best!

    • Day Before Kindergarten
      January 11, 2016 at 2:46 pm

      I created my own spreadsheet and had all of my own assumptions in it. Moved around investment returns looking at anything from 0% to 25%. Kept my savings level the same. I was surprised and empowered that the likeliest and biggest issue wasn’t the investment return but my savings rate. That keeps me less anxious and focused on the investment return. I know long term, it is up. And, I can control my savings rate!!!!
      I figured out last year that I can get a 0% return for the next 3 years and be FI. That was a nice relief point for me. Hope that might be helpful to you as well.

      • Chris @ Flipping A Dollar
        January 11, 2016 at 3:36 pm

        Thank you! I agree. I count money towards mortgage principal as savings (just like I would any other debt reduction). You’re absolutely right. Just like YMOYL talks about, savings rate is the important aspect. It means that you need less money to live and you will have more very quickly!

  3. Mr. FrugalInAR
    January 11, 2016 at 10:04 am

    Thank you for the update. I have been moving toward the optimized path over the past year, this post serves as further motivation. Due to MAGI and other factors I’m only able to capture about 75% of the optimization.

    What does optimized GP do with the excess cash thrown off on the back side of the year? Save for next year’s front load? Conservative Betterment allocation? I’m trying to optimize without introducing too much cash drag and haven’t fully figured that out.

    Also, as a point of caution, font loading a HSA potentially causes problems if insurance/Job situations change throughout the year. To prevent excess contributions (which can be withdrawn for a fee and hassle) one should really spread that equally over the year as HDHP coverage is maintained.

    • The Mad Fientist
      January 11, 2016 at 1:27 pm

      The Optimized GP paid $771 less in taxes in December (due to slightly overpaying throughout the year) so he just plowed that money directly into his taxable account (which is invested in VTI).

      Good call about the HSA. If you think you’re going to change jobs or insurance at some point during the year, better just put in the correct amount every month.

  4. Dayana
    January 11, 2016 at 10:18 am

    May I suggest adding a graph for the front loading portion of the article? It’d be interesting to compare that with the benefits of an optimized tax and employer match strategy.

    • The Mad Fientist
      January 11, 2016 at 1:30 pm

      Front-loading is just another optimization on top of an already optimized tax and employer match strategy (I definitely wouldn’t suggest giving up any employer match money to front-load).

      Check out the following post for more info:

  5. Gwen
    January 11, 2016 at 10:55 am

    I started at roughly the same time as the Guinea Pig with roughly the same salary. I thought it’d be interesting for people to see a real person’s results from someone so similar. So far, the Guinea Pig and I are doing just about the same, even with all of my spending fluctuations.

    • The Mad Fientist
      January 11, 2016 at 1:40 pm

      Hell yeah, Gwen! That’s so cool you can use the Optimized GP as a benchmark to compare yourself to, since the beginning of your journeys are so similar.

      I imagine you’ll start to overtake him though because, unlike the Optimize GP who just gets average raises every year, you’re an above-average Mad Fientist reader so I have no doubt you’ll find interesting ways to earn even more money along the way.

      Thanks a lot for sharing and nice work!

      • Gwen
        January 11, 2016 at 3:55 pm

        Thanks! I’m looking forward to one COL increase this spring, and another potential heftier raise when I finish up my entry level program and get a “real” job. I’ll also hopefully be getting some income from my rental and side hustle. It’ll be interesting to see how our results differ at the end of this year!

  6. tracy
    January 11, 2016 at 11:28 am

    Hi MadFientist,

    I have a quick question about the Guinea Pig experiment. If I understand right, each of the guinea pigs makes $72,000 and they’re both single. I was of the understanding that if your employer offers a 401K that you’re ineligible to also take the Traditional IRA tax deduction if your salary is >$71,000 (single filing), which would make them ineligible for the traditional IRA deduction. Is this correct, or am I missing something? Or is there a workaround, like your contributions to the 401k is subtracted from your income to calculate your eligibility?

    I’m ask because I’m in the same boat, so I’ve been contributing to a Roth IRA instead. But if I’ve been wrong all this time I’d be excited to learn it now so that I can adjust my IRA contributions this year to the traditional option!

    Thanks for all you do, this is a great series!


    • Trying
      January 11, 2016 at 11:40 am

      I second this question, I’m in the exact same boat.

    • Chris @ Flipping A Dollar
      January 11, 2016 at 11:41 am
      • Chris @ Flipping A Dollar
        January 11, 2016 at 11:43 am

        Now, that’s AGI not income so there’s definitely a distinction there!

      • Trying
        January 11, 2016 at 11:43 am

        But does the MAGI cut off begin before or after the traditional 401K deduction?

    • Mr. FrugalInAR
      January 11, 2016 at 11:50 am

      The 401k and HSA contributions reduce your MAGI which bring you back into Trad IRA eligibility. With a Maxed out 401k and HSA the Trad IRA max is more like 83K with a phaseout to 93K, which is still a problem for some of us. (ROTH and then Backdoor ROTH become the only options as MAGI increases)

      • Tracy
        January 11, 2016 at 12:30 pm

        Thank you all, that’s really helpful!

      • Trying
        January 11, 2016 at 1:20 pm

        Thank you, this answered my question as well.

    • The Mad Fientist
      January 11, 2016 at 1:48 pm

      Hi Tracy, I actually talked about that exact topic in the first Guinea Pig update way back in early 2014.

      As Mr. FrugalInAR correctly answered (thanks!), the HSA and 401(k) contributions lower the GP’s MAGI so that he is able to fully deduct his Traditional IRA contributions.

      • The Mad Fientist
        January 11, 2016 at 1:51 pm

        By the way, I’m really excited that you (Tracy) and Trying may contribute to a Traditional IRA now after reading this post! The Optimized GP is doing his job!

        • Mr. FrugalInAR
          January 11, 2016 at 3:43 pm

          From experience, the phaseout range requires vigilance. It is really hard to nail down your allowed contribution until Feb. of the following year. This is especially true if stock options/RSR’s, bonuses, capital gains, or small bus ownership are in play.

          If one is fortunate enough to be in/near the phaseout range (after 401k/HSA), and front loading is desired, it **may** be desirable to jump to the next IRA option (ROTH or Backdoor ROTH). Last minute re-characterization makes for fun at tax time.

        • tracy
          January 12, 2016 at 7:55 am

          Hi MadFIentist,

          Sadly, I’m still excluded from contributing to a Traditional IRA even with the adjustments. I’m just too rich, I guess. First world problems, eh? But I’m still really excited to know exactly what the rule is! Also, thanks to you I switched to a high-deductible account last year and fully funded my HSA, and I’m currently in the process of moving my taxable savings to Betterment for the tax loss harvesting aspect. Thank you!

          Side question on HSA, if anyone knows the answer… my understanding is that you can contribute a total of $3350 to the HSA yearly, but unlike with a 401K, if your employer also contributes some to your account, that’s subtracted from how much you can add. AKA, you+employer=$3350. Is that correct?

          Thank you!

          • Justin
            January 12, 2016 at 2:18 pm

            That is correct, the HSA is limited to $3,350 for an individual, or $6,650 for a family, regardless of whether that money comes from you or your employer. Which just means you’ve got that much more to stick into your taxable investment account :)

      • Al
        January 15, 2016 at 9:20 am

        This may be a silly question, but I’d rather look bad than not know the answer. I maxed out my Roth in 2015, and 2016 will be the first year I will be maxing out a Traditional IRA.

        Can I start contributing to the Traditional IRA now and then get the full deduction when I do my taxes if I have contributed enough to my 401k over the course of the year to put my MAGI below the fully deductible threshold? Or must I first contribute to my 401k to put myself below the threshold BEFORE I can start contributing to the Traditional IRA?

        Thanks a lot, love reading these articles!

        • Ginger
          February 11, 2016 at 10:30 am

          Justin, it is $6750 for 2016, not $6650.

        • JE
          February 14, 2016 at 1:47 pm

          The IRS is not concerned with the chronology, simply the final numbers match up.

  7. Seeking Saturdays
    January 11, 2016 at 1:22 pm

    Great stuff as usual from the Mad Fientist! I’ve learned quite a bit from you and Jim Collins and many others. Keep up the great work! I love seeing the guinea pig comparison.

    I plan on using the Roth IRA laddering idea to climb my way up the Financial Independence ladder. :-D Without these great strategies, it felt like it was going to take forever!

    • The Mad Fientist
      January 11, 2016 at 1:53 pm

      Yeah, the Roth IRA conversion ladder completely changed the game for me as well!

  8. NWOutlier
    January 11, 2016 at 2:25 pm

    Love this; gives me confidence I’m going the right direction;
    Fully Funded 401k
    Fully Funded Spousal Traditional IRA
    Fully Funded Roth IRA
    Fully Funded H.S.A
    Plus – Extra in a Taxable Vanguard Account (500-1500/mo)
    Plus – Keep a % in liquid regular old boring savings account

    Can’t wait till this explodes!

    • Trying
      January 11, 2016 at 3:14 pm

      Haha I wish I would have thought of using incendiary verbs and adjectives to describe my financial plan first!

    • The Mad Fientist
      January 11, 2016 at 4:09 pm

      Nice work!

  9. Trial by FI/RE
    January 11, 2016 at 2:50 pm

    Good to see the little tips available here do make a considerable difference. I’m not as lucky as the guinea pig as far as salary goes but at least I’ll be on track relative to how much I make compared to him. Once I finish grad school I should have enough of a gap in my spending to double my contributions.

  10. Abe
    January 11, 2016 at 3:54 pm

    For those of you that decide to Front-load your retirement accounts (401k/457b etc), please be aware of your employee’s policy with regards to matching. For example, my employer will match up to 3% EVERY quarter; meaning, if I elected to max out my 457b at $18,000 in the first 3 months of the year, I would not receive a 3% matching for April-June, July-Sept, and October-December.

    Hypothetical Situation:
    Gross Income: 100,000
    Employer’s Matching: 3% per quarter
    4 Quarters per Year (Jan-March; April-June, July-Sept, Oct-Dec)

    If Front-Loading with an employer that matches 3% per Quarter
    $18,000 within the month of Jan-March
    Total employer match:
    3% of Jan-March income ($25,000 gross) = $750 match

    If you AVERAGE your contributions with an employer that matches 3% per Quarter
    $4,500 each quarter for a total of $18,000 for the year
    Total employer match:
    3% of Jan-December income ($100,000 gross) = $3000 match

    If you PARTIALLY Front-Load your contributions with an employer that matches 3% per Quarter
    $15750 contribution for the 1st quarter; $750 for 2nd-4th quarters; which would add up to $18,000 for the year
    3% of Jan-December income ($100,000 gross) = $3000 match

    And, all this is contingent upon how you’re paid. If you’re salaried, you can reasonably estimate your annual and quarterly pay because it varies little from month to month. If you’re paid hourly and overtime is a frequent occurrence, this can become more complicated. For example, my own pay can vary from 90k to 200k depending on how much I choose to work, so it’s less complicated for me to pay regular amounts ($693 paid every 2 weeks). However, because I choose to average out my contributions, I will never benefit from Front-Loading.

    So, the choice is yours: You can Front-Load or not. But, please be AWARE of your company’s policy so you don’t lose out on matching contributions!

    Happy Investing!

    – Abe

    P.S. Sorry if my comment is a bit disorganized or unclear. I’m at work and I don’t have the liberty of going over my comment in depth right now.

    • The Mad Fientist
      January 11, 2016 at 4:12 pm

      You’re exactly right, Abe. The last thing you’d want to do is lose out on some employer matching in order to front-load your retirement accounts.

      I actually put a big warning in my front-loading article about that but I probably should have mentioned it again in today’s post.

      Thanks for doing it for me!

      • Abe
        January 11, 2016 at 4:18 pm

        Anytime! I do recall reading the disclaimer in the earlier article, but a reminder never hurts, right?


        • John
          January 12, 2016 at 2:14 pm

          Abe, my employer and most other employers I worked for do a “true-up” contribution so even if you front load your 401K, they provide the match at the end of every qtr. Check with HR/payroll.

          On the other hand if you front-load and leave your job mid-year and join another employer then you lose out on the “true-up” contribution.

          I prefer front-loading because in 2010 I was laid off mid-year and had to work for an employer who did not have 401K so I regretted losing the opportunity to contribute.

          • Abe
            January 12, 2016 at 2:42 pm

            John, I made my post to forewarn those that have a similar situation as my own. I’m already aware of my HR/payroll hence my statement, “please be aware of your employee’s policy with regards to matching.”

  11. Fervent Finance
    January 11, 2016 at 4:21 pm

    Gotta love 401k’s and HSA’s! I maxed out my 401k last September. Maybe I’ll be able to one-up it this year!

  12. Chad Carson
    January 11, 2016 at 4:21 pm

    Roll-on, optimized Guinea Pig!! I love the detailed, step-by-step view of these strategies over time. Thanks for sharing. I’ve been sharing the articles explaining all of the specific strategies to a lot of people who need to know about them.

    I’m self-employed, so not all of these apply to for me. But I do love the HSA and max it out first every year. And if I weren’t investing so much outside of my retirement accounts with sheltered real estate investments I’d probably open up a solo-401-k to get more pre-tax benefits. But so far it hasn’t been worth the effort because I’m minimizing taxes pretty well at my income level.

    Hope life is good in Scotland. Have you had any light yet? Or still dark 24 hours? ha, ha.

    • The Mad Fientist
      January 17, 2016 at 8:02 am

      Hey Chad, glad you enjoyed the post and thanks for sharing my stuff!

      Life in Scotland is good, thanks! It is already starting to get noticeably lighter so I’m glad we made it through the really dark period. Counting down the days to San Diego though :)

  13. Matt
    January 11, 2016 at 5:59 pm

    So just to be clear here, the normal and optimized GP scenarios have the same amount of spending money each month, right? If so, the results are simply amazing!

    • The Mad Fientist
      January 17, 2016 at 8:04 am

      That’s right, Matt! They both make the same and spend the same (so they have the exact same quality of life) but the optimized GP is over 2 years closer to retirement!

  14. Eric
    January 11, 2016 at 8:06 pm

    Instead of taking the hit on the growth, why not use a Roth and let it grow tax free. I get that you’re reducing your taxes upfront, but why do you want to get taxed on the growth?

    • Trying
      January 12, 2016 at 8:32 am

      I think the key isn’t just to go traditional, but to also invest the tax savings. Over time, that combination has been shown to yield some fantastic results. You will also end up paying less taxes on those earning in the long run because the long term capital gains tax is significantly lower than the top tax bracket the average person is. When you’re investing in traditional retirement options to save on taxes, you’re actually saving on taxes from the last dollars you earned (in other words the highest tax bracket you fall into).

      • Eric
        January 12, 2016 at 1:09 pm

        But you’re not paying capital gains tax, you have to pay income tax when you withdraw from a traditional, right?

    • Mike S
      January 13, 2016 at 12:17 pm

      I may be wrong, but I think his plan is to us the Roth Conversion. He has a few posts about how this works.

      1. Put it in as Traditional and get the tax break.
      2. Retire early so you have low income before traditional retirement age.
      3. Convert Traditional IRA to Roth after retirement.
      4. Withdraw as Roth.

      This strategy only works for early retirees. It’s awesome because you don’t pay taxes on the front or back end.

    • The Mad Fientist
      January 17, 2016 at 8:04 am

      Eric, as Trying said, take a look at this post.

  15. Brad
    January 12, 2016 at 12:32 am

    I don’t recall if you’ve already mentioned somewhere why VTI vs VTSAX. Hoping you can expand on the pros/cons and what led you to the decision. Thanks!

    • The Mad Fientist
      January 17, 2016 at 8:08 am

      Hi Brad, I chose the ETF version because I anticipate doing some tax-loss harvesting and tax-gain harvesting during the experiment. Since there is a frequent-trading policy for the mutual funds (you can’t buy back the same fund within 60 days of selling it), I figured it’d be easier to use the ETFs so I could buy back earlier.

  16. Nick
    January 13, 2016 at 8:05 am

    Just wondering if I am missing something. Isn’t the maximum you can contribute to a pre-tax account (not counting HSA) $18k? Just trying to figure out the contributing $18k to your 401k and another $5.5k to traditional IRA. I was under the impression best you could do was max 401k at $18k, max your HSA, and max your Roth IRA.

    • The Mad Fientist
      January 17, 2016 at 8:09 am

      No, you can definitely contribute $18k to your 401(k) and still max out your Traditional IRA.

  17. fireweed
    January 13, 2016 at 10:10 am

    After reading your tax avoidance posts, I:

    Switched from Roth to Traditional
    Maxed out 401k
    Started contributing to HSA, maxed – I had this at work but barely knew what it was
    Started front loading

    2015 was the best year for savings for me. Your posts helped me do that.

    • The Mad Fientist
      January 17, 2016 at 8:11 am

      That’s awesome, fireweed! Congratulations on killing it in 2015 and thanks for letting me know that my posts helped you do it (it’s very motivating when I hear things like that)!

  18. Lady FruFru
    January 24, 2016 at 5:30 pm

    Your articles are so helpful. This is the kind of stuff I hate to figure out (I hate math!) and you are so great at this and seem to enjoy it. Thank you, thank you, thank you!

  19. BeSmartRich
    January 26, 2016 at 3:10 pm

    Well done. It is interesting how many people never take advantage of easy tax instruments to enhance their cash flows. It only takes a couple of days of research and commitment. People please get out there and do something about it rather than complaining all the way.

    Thanks for sharing!


  20. Sherri
    February 2, 2016 at 11:26 pm

    Do you have a post about the spreadsheet? Trying to fill it out for January and a little confused I guess. We use YNAB for our budgeting/spending and since we only track after-tax income, do I need to back into some of the other stuff (HSA, which we max, health insurance, etc.)? Also, how do I deal with “spending” that is debt repayment? I have a student loan and we also contribute towards our kids 529 each month. Since those aren’t our assets I assume we ignore those?

    Lastly, how do the calc’s on the FI sheet work? For example, it’s calculating a lower FI on that (even though I am paying extra each month) and I assume it’s because I am doing the full payment with escrow? Yet I haven’t given the loan duration or interest rate anywhere…..

  21. Jupiter
    February 17, 2016 at 2:23 am

    Really interesting post. I’d like to note one potentially unknown consequence of the front loading strategy. My company pays a pretty generous 401k match of 5%. If I were to front load my $18,000 as fast as I could, (to keep it simple let’s pretend that happens in the first 4 pay periods @ $4500 per), then they would still only match at 5% of my salary for those 4 pay periods. The following 22 pay periods (assuming 26 bi-weekly pay periods per year), they would make no matching contributions. To make up the shortfall they would make a single “catch up” matching contribution in the following year to bring the total up to 5%…sometime in March/April if I remember correctly.

    I’m not saying that front loading is necessarily bad, but in my case it would mean that a significant part of my company’s match would be deposited up to a full year later than if I were to spread my $18,000 evenly across the entire year. Just something to consider.

  22. Art
    March 7, 2016 at 7:31 pm

    Mr MF,
    Have been reading MMM , you and JL Collins for a few years now,and have majorly upped my savings game to a maxed 457 ($24k – i’m almost 59), & maxed HSA. I am 59 and plan to retire in 3 years but hopefully less as I started a side gig that looks pretty fruitful. My question is should I be putting my 457 $ in Roth or tax deferred. I make about 70k, wife makes 20k, and side gig will net about 30-50k this year. I have about 100k in my 457. I am lucky enough to have a pension that will pay about $2400/mo in 3 years, which will cover expenses, so that is why I say 3 years, but the side gig might change all that. I switched this year to putting more into Roth than tax deferred, but now wondering if I should switch back to most towards tax deferred especially with this down market. Any help is appreciated. Thanks

  23. Alan
    April 1, 2016 at 12:28 pm

    Hi, what is the best (low commission and able to invest in Vanguard funds) HSA bank for individual?

    • Acastus
      December 20, 2016 at 1:17 pm

      You answered it yourself. Vanguard offers HSA accounts.

  24. Jeff
    June 8, 2017 at 3:56 pm


    My employer has a Money Purchase Pension Plan where 10% of my income is calculated and saved in the account above and beyond my salary each year. Last year the amount was $15K. I never hear anything about this plan. What I want to understand is it still legal to have a personal IRA and my wife’s IRA? I’m at an age where I can place $6,500 into each account. I believe it is legal to have our own account and discussed it with a local tax accountant in the San Francisco Bay Area of California. Do you understand the same? I do not get the annual tax deduction because my income is too high. I want to make doubly sure that I would get a penalty.

    My wife also has self employment income and I understand she can save about 20% in a SEP. Would this be tax deductible? I don’t know if I can open an HSA since my employer has a generous health plan. Am I missing out on an opportunity here?

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