Often, new writers will ask, “How much income do you need in order to start a writing career?” The answers can vary dramatically, so here are some things to think about.
When I was a young writer, I lived in a small house with my wife and one or two toddlers, so my needs were pretty modest. I’m not sure what your monthly income needs to be, but it will vary depending upon how expensive it is to live where you are, the size of your family, outstanding debts, health issues, and so on.
If you’ve got a small family—say one or two people—and you don’t need people to work for you, then you might get by with as little as $5,000 a month here in the U.S. I’ve known some authors who have moved to islands in the Caribbean or gone down to South America in order to reduce their cost of living to under a thousand a month.
So figure out what your needs are, and then multiply that money by about 18 months. That’s what it will take you to start your career.
For me, it takes a bit more than $5,000 a month. I have a large house, and I have four part-time employees. So I can tell you that my monthly costs are well above $12,000 per month. Thus, I have to have about $150,000 lined up for the next 18 months to feel comfortable.
Once you figure out what you need, you have to ask yourself, what are my income projections? How will I meet my expenses?
When your first book sells, your first line of income will typically be an “advance against royalties.” This is money that the publisher will pay you up front, often when you sign your book contract but sometimes part of that advance might be paid when the novel is released.
So, let’s say that I get a nice advance for a novel. Let’s say it’s $100,000. I will pay 15% of my money to my agent, so now I’m down to $85,000. If I can cap my expenditures at $10,000 per month, this means that I only have an income for the next 8.5 months. After that, I’m either going to need to make another book sale, start putting money on credit cards, or go find a day job!
If you do the math, you can see that taking a small advance just doesn’t cut it. I’ve known authors who have sold books for as little as $2,000 for a novel. Most of the authors who do this are what I call “hobby writers.” They can’t make a living off a small advance, but that doesn’t mean it won’t pay off in the long run. In fact, one old friend sold three novels for that amount and then gave up. However, a couple of years later, she made millions of dollars in royalties on foreign sales.
The truth is, that if you do sell a novel for that kind of advance, you will probably make other sales in short order. Most of the time, when I sell a book in the U.S., I also sell it in France, Germany, the UK, Russia, and in a dozen small countries elsewhere. Only about half of my income is derived from the U.S. There will also be audiobook sales and sales to book clubs, and there is also always a possibility of getting a movie option. So if I get an advance of $100,000 from a U.S. publisher, then I can normally see other income trickle in pretty quickly.
Now, you can’t always plan on getting royalties from publishers. You should know that if your book does well, it will usually take at least a year for the book to be published, and you probably won’t see any royalties from the publisher until later. The book has to “earn out” the advance, and then sell well enough to bring in more money. So if it takes a year from the time that you sign a contract until the book comes out, you normally won’t begin seeing royalties for a year after that!
What does that mean? Well, if you get a huge advance of, say, a million dollars, it means that you can easily sit back, put your money in the back, and maybe live off it for a few years. But most of us are working writers, and we don’t get huge advances. Sometimes the advances are so scrimpy, that we always have to keep an eye out for extra work.
This means that as soon as I make a sale, I have to take steps to get another book written and sold quickly.
It may not seem obvious to a new writer, but one of the things that you have to do is to protect your money. You have to keep a “grub stake” that has a year’s income in it. But you should know that there are a lot of scammers out there who will try to steal your money. Many of them will come to you asking you to start a business with them or make an investment. I’ve tried it, and lost a lot of money. As an author, I’d like to suggest that you should invest frequently—but only in yourself.
Writer’s Peak in Dallas
The Writer’s Peak workshop is coming fast! You may enjoy giving the workshop as a gift to a writer you know . . . or yourself. You can view this workshop and all my other live workshops here.