Protecting Your Working Capital

Starting a writing career is tough. Generally speaking, you will have to write your first book—or two or three—on the side while you are working at a full-time job. When you do it, remember that you are “investing in yourself.” Don’t whine about it, please. Most of us writers have done it this way. When you whine at me, it’s sort of like whining to an Army Ranger about how tough basic training is—all it does is make me want to kick your butt all across the parking lot.

I also sometimes hear new writers talk about how tough it is to write professionally. They’re correct. Writing crap is easy. Writing at a level where you are competing against the best writers of today, can be hard. But it can also be very, very rewarding.

Now, when you sell your first novel, you will most likely sell it in the United States.  The money you get is called an “advance against royalties.” In other words, the publisher is paying you in advance against expected profits. Any money they pay you, you get to keep, even if your book never “earns out” enough to repay that advance.

This money is sacred. This is what you’re supposed to live on while you write your next masterpiece. Do not frivol it away.

You need to keep enough income in the bank to last for a year or two. If your first advance won’t let you do that, then put the money in the bank and use it wisely. Your spouse might suggest that you can take that money and go to France or buy a new car. I’d also remind you that you can take that same amount of money and file for a divorce from that spouse. Anyone who would sabotage your career that way—you don’t need them in your life.

As you begin writing, it can be a hard road. About half of a writer’s income will come from foreign book sales, but many foreign publishers don’t want to buy rights to your books until you have several of them under your belt—about five. That means you might have a very low income for the first three to five years. Plan on it.

But also know that very often, strange things happen. I know many writers who have very high incomes in certain countries. One horror writer I know became the national bestseller in Romania. Others sold big in Germany, England, or Japan—and in each case, the author was able to support themselves from one small foreign market. Profits from the rest of the world became gravy.

Normally, when you write a book you get paid in advance, but you also get another check “on publication.” This is often about ½ of the payment, and you can use that to write, too.

Then of course there are movie and audiobook deals that will come your way. So while it might sound kind of bleak starting out, I’ve had writers I train who call me after a year complaining, “I’m making too much money. What do I do now?”  

Remember that when you write a novel, the time between turning it in and getting paid for turning it in might well be six months to a year. Plan on a year, and any money that you get paid on turning your novel in has to go into the bank and hold you until your next sale, so work fast.

Most people think that writers are rich—and are therefore easy targets for fraud. Most writers that I know have been conned at least once, so a few months ago I asked some award-winning authors about their experiences. I asked, “Who stole your money?”

One author immediately answered, “My brother-in-law. He presented me with a very exciting business opportunity and started a business, then never paid me a dime.” Another award-winner said, “It was my brother,” then added, “I was talking to (name withheld), and his own parents begged for his advance and then never paid him back.”

I’ve been conned more than once. One was a highly trusted financial advisor and the brother to my wife’s best friend. He presented me with a very safe investment in some land and then took my life savings. Another was a book distributor. I did a print run of hardcover novels and had him sell them–he never paid me a cent. So I lost the investment both in the books and all profits from them.

I’ve learned my lesson.  I will never invest with anyone again. The smartest writers I know never lend money to friends or family, and they never invest with them. Get that through your head.

You certainly don’t want to invest. Imagine that your brother wants you to open a pizza parlor with him. Do you really want the stress of owning a pizza parlor? Do you want to deal with employees and oven fires and refrigeration units that break down?

You’re a writer, damn it, so act like it! Now stop reading this article and go write!

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Fyrecon

I will be teaching a master class writing workshop at Fyrecon this June in Layton, Utah. I’m also offering a special for Fyrecon. Get the Writing Enchanting Prose workshop there for only $350–a savings of  $150–if you use the code: EnchantedFyre19. You can register here.

SpikeCon

I will also be teaching at SpikeCon in July 3, also in Layton, Utah. Learn more here.

Don’t forget to register for  two upcoming writing workshops. Writer’s Peak July 19-20 and The Plot Thickens Master Class September 18-21. More info on MyStoryDoctor.com.

Million Dollar Outlines is $6.99 on Amazon Kindle and free with Kindle Unlimited! Learn how to outline a novel and become a best seller. The lessons taught in this book are invaluable to have. Get it here.

All short stories are now $.99 on Amazon!

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