2016 Atypical Life Financial Review

As a year comes to a close, it is time to review your financial situation for the year and look for opportunities for improvement going forward. As I discussed in the Power of Tracking, simply the act of tracking income and expenses will make us more aware of our habits. Without consciously trying to reduce expenses, they will go down, due to the increase of awareness. I know when I track finances, the fact that I have to input large numbers in for expenses gives me pause, and makes me look back at the purchase and really evaluate, was this worth it? Did I really need this or that whatchamacallit?

The real power of tracking comes when you analyze all of the data collected. This is when the conscious mind starts to make decisions to improve your situation and achieve the atypical life of freedom earlier. So let’s take a look at our financial situation for the year.

2016 Income

2016 was another good year for us on the income front. I received a 2% inflation raise on my salary for the year. The biggest benefit that we still have in 2016 and continuing for 2 more years is the fact that I am an expatriate living in China working for a multi-national company. As such, I have a wonderful expat package that includes incentives to get us to move abroad and live in conditions that are different from the norm.

Expat Income

As we can see above, I received nearly $16,000 in expat income. This is the expat location premium, or hazard pay in expat vernacular. This income is un-taxed from my perspective because the company does a gross up on this amount, so that we can keep it all. I will write more in the coming weeks about how I have done my accounting during my time abroad because the company pays for a lot of expenses for us, but they show up as income on the W-2.

Investment Income

After paying off our $50,000 of student loans in 2015, I was finally able to start amassing money in investment accounts. I already maxed out the Roth IRA for both my wife and I, and was contributing about 10% to the 401k. When the student loans were paid off and I felt the relief of not having a liability always looking over my shoulder, I started to pour all extra income into investments. This brought me from near $0 in dividends to $3,150 in the course of 1 year. The 401k program changed again this year, with the company offering up a pretty generous 9% match. I maxed out my contributions with $18,000 plus ~$4,000 after tax added to the balance. This year, saw me buy and sell many different mutual funds at Vanguard, where I keep all of our investments. In the end we settled on the KISS method, “keep it simple stupid.” We now have 90% VTSAX or equivalent in 401k and 10% VBTLX. More on this in the future.

Gift Income

This year was a one off on large gifts. We received a gift of $50,000 to help with purchase of a house in the future. We plan to purchase a residence when we come back to the US permanently and can settle down to a single location. This was a wonderful jet fuel boost to our brokerage account this year and can helps to account for the major increase in dividends received.

Racing Income

Racing around China this year, even with only 7 races total, I was able to net $320. Of course, this money was turned around and more than spent on cycling things throughout the year, but it is nice to have an income from the sport that I love.

Mrs. Atypical’s Income

For the first time since we moved to China, Mrs. Atypical got a salary. She has learned Mandarin to a conversational level and is now able to teach other foreigners Mandarin. She has also picked up photography and got a couple of paid gigs throughout the year. Her income was rounded out with pet-sitting for friends and coworkers throughout the year. This all goes to show, that income can come from many different places, and is available even from the things you love. For 2017, we see this income increasing significantly, though not to the level of Mr. Atypical’s “real job”.

2016 Expenses

The total expenses for the year of 2016 seem really high for the Atypical household, however, when we subtract the tax expense which can be mostly slashed in early retirement, the total expenditure was $31,000. This yields a need for $775,000 in retirement savings to live forever on with the 4% rule of early indefinite retirement. Whether we follow down this path of retiring once we reach the total savings goal, or generate a large enough income from side-streams is yet to be seen. But let’s analyze where all of these costs came from and look for ways to save further.


A common theme as an expat in another country is your budget and expenditures looking anything but normal. When viewed from the viewpoint of an American living at home in the states, this all looks impossible. The Atypical household spent $123 on auto expenses for the year. This includes only gas and toll road fees on our 2 and 3 week vacation back to the US to visit family. We own no cars, therefore, we have no auto insurance cost. We sold both of our cars before moving to the China, since it makes no sense to pay upkeep on a car that will sit for 4 years. Luckily, one of these cars, I sold to my dad for a steal, so we were able to borrow it for free on our vacation back to visit them. While in China, all of our auto expenses are covered by the company as part of the expat package by allotting us with a personal driver.


Business expenses for the year are associated with shipping and selling items as well as establishment of our blogs. Bluehost is a wonderful host for our blogs, and was a great deal with the basic package for 3 years. Bluehost will be able to scale with our needs as the blogs grow and we look forward to many more years with them.


Fees for the year were all unavoidable. It is quite unfortunate when your company locks you into a 401k or HSA that then charges you innumerable fees. We got out relatively easily with the 401k being hosted at Vanguard now. I was very happy with this change in our benefits because the rest of our investments are hosted there. However, the Vanguard 401k sponsored by our company charges $75 per year, and then there are further fees associated with using their Vanguard Brokerage Option if you actually want to buy Vanguard mutual funds. I was happy with one option from the standard selection of 15 funds, so elected to save my money. Our HSA changed this year from MyBenefitWallet to HSA Bank which will save us $15 per year and allow us more investment options within TDAmeritrade. We will be purchasing VTI once all is processed.


Our food budget is typically $400 per month for the 2 of us, so $3,800 on the year is a great number. We spend about 2/3 of this on groceries and 1/3 on dining out. We could reduce this further by not buying western ingredients in China. These ingredients, butter, cheese, sugar, and chocolate chips, are the main reason we are not around $3,000 total for the year. When you are living abroad and only eating the local food, life is very cheap, especially in China, however, we would go crazy without indulging ourselves on some of the comforts of home. Can you imagine going 4 years without cookies?


The Atypical family is currently in a super ritzy apartment complex in China, however, the home/housing cost does not show this. We pay a $325 housing normalization to the company each month for the privilege of living in a $1,000,000 apartment. This was also part of the expat package that will be detailed more in future blog posts about the benefits of expat life. We paid $325 per month for the 1500 sq ft house we lived in prior to moving to China, so the company allowed us to continue living at the same cost. Our basic utilities are also covered in the expat package, leaving us only to cover cell phones and internet costs. Our 2 smart phone plans cost 100 RMB per month, or ~$15 at today’s exchange rates. The internet, which is purchased once per year, works out to $20 per month for another good deal, though the quality is sub-par and is influenced by the “Great Firewall”.


Our insurance for the year was $3000 and was only health insurance. This seems way too high for me, since the cost of health care in China is extremely low. Mrs. Atypical spent one week in the hospital in 2016 with a minor surgery and many IVs of fluids all for a total cost of $400. This only reached half of our deductible, and the other minor visits throughout the year did not reach reach it. Moving towards 2017 we have founds new ways to reduce this cost significantly.


Mrs. Atypical is an animal lover, and her horse was the expense for Pets. We had a bad year here with her horse passing away in June after fighting through health issues for several years. It was a sad time for us, and was made harder when the boarding barn owner would not refund us for the board paid in advance for the entire year. We paid in March for 12 months, and Mrs. Atypical’s horse lasted only 3.5 months, so we were looking for a refund of $1,600, however, she would not refund us, calling into account the contract that we had signed while we lived locally. The large lesson learned here, is even if you are friends, dealing with money needs to be written down clearly and all expectations set up front before money is exchanged. This incident cost a friendship along with the monetary cost, but we have learned that trust with money involved is best left with only family. Anybody else can leave in the blink of an eye.

Shopping Expenses

Our shopping expense, which is the expense to cover all discretionary items bought, was way over budget this year and excessive even with the budget we allotted. Check out my goals for 2017 to see a discussion on my excess spending habits. $600 per month plus a few big ticket items accounted for these expenses. Below you can see a break out of where these expenses went. We ended up buying 2 kindles this year due to losing one and another breaking. Our big expenses on the year were in cycling gear and horse gear. Mr and Mrs Atypical reviewed all items in all of these categories for excesses and not needed things bought on the year, but did not find many at all that were not used or a total waste of money. Mr. Atypical is still building a solid toolbox full of tools to fix anything when it breaks and build things when the whim takes him there. We continue to expand our tandem touring gear to prepare for a long-term tour in the future. When we reach the atypical life of freedom, we plan to do a long term tour to visit the world while bypassing the bad and expensive part of travel, transportation.

Mrs. Atypical came across a deal on a new to us saddle for horses that is worth upwards of $4000 and we got it for $2000 after negotiations. This was bought way ahead of a time when we need it, but some deals have to be taken when available. We thought long and hard on this purchase since it was a long ways out, but decided if we could get it for $2000 then we should go ahead and buy it now.

The income received from Selling Stuff was put towards the upgrade of those items. We changed cameras from a Nikon D7000 (large DSLR camera) to an Olympus E-M10 (small micro 4/3 camera) for better travel photography. Also, my company has a health incentive program with step counting, so to have the optimal watch for that Mr and Mrs Atypical got Garmin smartwatches, a Fenix 3 and Vivoactive. We sold nice watches already owned to purchase these, so the total shopping expenditure should be ~$8500 with the selling stuff offset.

This year we plan to cut way back on spending here, since we are incrementally getting closer to having everything we want. Once that point is reached, where we have all the gear and tools that are required for our activities, then the shopping budget will mostly be maintenance cost on the gear we have.


We save $6,000 per year for travel expenses and we did a good job of staying within this budget allowance. Part of the way we did this was with our flights home to the US being covered by a home leave allowance in the expat package. Therefore, our expensive Chinese New Year’s trip to the Philippines, a 2 week trip to Sichuan for a bike tour and a Christmas trip to Zhangjiajie (Avatar Mountains) fit within our travel budget. Along with those trips were several more weekend and long weekend trips around our home in China.

2016 Profit and Loss

Overall, 2016 was another good year to us. On expat assignment in China we made a profit of over $100,000 which brings us one step closer to personal and financial freedom. Looking towards the future, we have the ability for greater savings in expenses in the shopping, pets, and medical expenses categories, as well as increasing income. We look to increase business income from $0 to a profit in 2017 along with Mrs. Atypical’s various side job income increasing. Our expat assignment continues to be a boon to savings, and we look to maximize the savings over the next 2 years on assignment.

Let me know in the comments what you think of our profit and loss for 2016. We are always looking for ways to achieve the atypical life of freedom sooner.

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