BALANCING THE BOOKS - A Financial Plan For The Indie Author (Part 1 of 2)
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The life of an indie author can be filled with uncertainties, for most of us the largest of these worries pertain to income. As an independent (indie) writer, instead of receiving a regular paycheck, our payday only comes when we sell the words we’ve written. Authors, don’t let this dissuade you from following your dream.
Have you ever considered that fact that in today’s world full-time employment is nearly as risky as working for yourself? With only a very few exceptions, there’s no job on Earth that is completely safe in today’s economy. Most of us know at least one person who’s been blindsided by the news that their job has been by outsourced or eliminated. In this economy the real risk is to not have a viable side-hustle or multiple sources of income.
The next decade in America looks even more bleak in terms of job security. Carl Benedikt Frey and Micheal A. Osbrorne of Oxford Martin School & Faculty of Philosophy in the UK predict in the report The Future of Employment,
"According to our estimate, 47 percent of total US employment is in the high risk category, meaning that associated occupations are potentially automatable.*"
Robotics and artificial intelligence are forecasted to render an unprecedented amount of jobs currently performed by humans obsolete. This current wave of innovation is likely to change our society as drastically as the Industrial Revolution did in the 1800’s, possibly even more. Many believe jobs that involve a high level of creativity will be the most secure during this approaching technological tsunami. No one can foretell the future with complete accuracy but you can take an educated guess based on current forecasts to maximize your chances of success and prosperity. It seems the only real risk now is doing nothing. This is the perfect time to stop worrying and to start planning. The good news is the future looks very bright for creatives.
Most writers I know are born dreamers, it’s tempting for us to romanticize the writer’s life but it's damn hard work. When you begin to look at how much income you’ll need to earn to survive it’s easy feel panic-stricken and paralyzed. I know how frightening it can be, I’ve been in the workforce since I was fifteen years old and receiving a regular paycheck now for over thirty years.
I began retooling my entire life about a year ago, preparing to make writing my full-time gig. One of the first, and the most difficult, changes for me was a change in mindset. I realized I needed to stop thinking like an employee and start thinking like an entrepreneur, actually an authorpreneur.
Is Writing Your Full-Time Career or a Side Hustle?
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The very first thing to determine is if you want to make your writing your only career or if you’d like to pursue writing as just a source of extra side-income. There's no shame in the latter. You can also start part-time and scale up gradually like I’ve done. Most writers I know have scaled up to becoming full time writers by juggling a mix of two or three different occupations, like a day job, bartending, part-time regular employment, or even driving for Uber until their writing careers grow to the point where they can do nothing but write.
Your Safety Net
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Unless you’re an adrenaline junkie or much braver than I am you must also build yourself a safety net before you take the leap of faith and quit your day job. I’ve been spending twenty to thirty hours a week for the past three years developing my writing career in addition to working a full time job. This means building a freelance clientele, writing/self-publishing/promoting my own books, and most importantly building a reliable network.
As an author-preneur it’s imperative to build your business and your brand before you strike out on your own. Your odds of success as a full-time writer will be much greater if you have a practical plan in place which includes concrete and realistic goals. You must decide how much of a financial cushion you’ll need to comfortably strike out on your own and how long it will take you to save this amount. Ultimately, the goal is to never even have to touch this money but the important thing is it will be there if you need it. It’s very easy to overestimate or underestimate when deciding how much money you’ll need to support yourself if you hit a dry spell. You need to determine your “magic number.”
What’s Your Magic Number?
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I suggest saving at least eighteen months worth of your current salary before you turn in your two week’s notice. I’m a little more conservative so my magic number has always been 24 months’ worth of my current salary. If I could earn the equivalent of two year’s salary from my writing then I would feel comfortable making the decision I’ve been fantasizing about for years. Of course, this magic number will be different for everyone but the first step is to realistically determine what your personal number is. Once you have the number, you have a target to aim for and your dream then becomes anchored in reality.
Downsizing Your Life = Giving Yourself A Raise
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Downsizing just doesn't work for corporations. The easiest way to give yourself a raise is to come up with creative ways to decrease your personal monthly expenses. To aid in your transition it helps to deeply examine your life and decide what can be eliminated from your monthly budget as well as how you can maximize the revenue from your writing. It’s best to have a lean budget as you’re making the transition into writing full time, at least in the beginning. At this stage frugality is your best friend.
This part came easily for me because I’m one of the few creative people I know of that are also very fiscally conservative. My parents love to tell the story of how when I was about eight years old I would save my allowance for months to buy a toy that I had my eye on only to decide the next day that the toy wasn’t nearly as dazzling as it looked on the Saturday morning commercials. I would return the toy to the store and get my refund.
I guess it’s always bothered me to hand over my hard earned cash on things that aren’t a good value or something that doesn’t add any real value to my life. I would much rather have money left at the end of the month to spend on wonderful life experiences like seeing new places and trying new restaurants than having my life cluttered with a bunch useless crap.
When it comes to buying stuff I’ve rediscovered something our ancestors already practiced out of necessity, research everything you buy and purchase the best quality you can afford, it’s always less expensive in the long run. For example, it absolutely drove me crazy to spend twenty dollars on a pack of five disposable razor blades that lasted only a few months. Three years ago purchased a Merkur brand safety razor for thirty dollars and a pack of two hundred blades for twenty dollars. I’ve only gone through half of the box of blades in three years. This one purchase has saved me several hundreds of dollars so far. Once you retrain your brain to think this way you’ll find many other ways to save money.
As I was striving to live my ideal writer’s life, the first thing to be eliminated from the household budget was satellite television. I was spending over one hundred dollars a month for this service and only watched a handful of channels. As an alternative, my wife and I discovered the digital TV antenna and AppleTV. Now we get over twenty free local channels over the air from the antenna and more content than we can watch on NetFlix and Hulu for around sixteen dollars a month. The content on these streaming services isn’t as current as cable or satellite television but it’s worked out just fine because we’re watching far less television and have more time for more important things. If we want to watch a more current film there’s always the option of renting DVDs from RedBox for under two dollars per movie.
If you really start to examine your life you’ll be amazed at the number of creative ways you can find to lower your expenses. It’s just a matter of taking a look at your own personal situation and decide what you can live without. Some other suggestions to get you started are growing your own vegetables and canning for use later and shopping at thrift stores. I haven’t owned a new car for years but save thousands by buying cars that are a couple of years old but still in great condition. I also bike to work when weather allows.
You’ll find that most of the cuts you make to your budget will come along with the fringe benefits of simplifying your life, improving your health, enhancing your creativity, and giving you more free time to do things like read and write.
To Be Continued. Part Two of BALANCING THE BOOKS will appear Wednesday evening.
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very thorough thinking here, I like learning how others think about merging their livelihood and creativity and look forward to more!
I appreciate it, @natureofbeing! It's not an easy thing to do but we can improve our odds with a good solid plan. I'm glad you enjoyed it!
Mr @ericvancewalton An excellent insight into the non-cushioned life of an everyday writer. You have so much writing experience to pass onto Steemit writers and I would love to see more posts like this.
I do look forward to your imagery laden musings from Amsterdam. I predict your fresh viewpoints will have many Steemians grasping for their mice - including myself!...not long now my friend ;)
Thank you, @mindhunter! I enjoy passing on what I've learned. I like to prevent others from making some of the same mistakes I have. I'm very excited about Amsterdam. I'm going to take lots of pictures and will be doing several articles about the trip. Traveling is my thing, I plan on seeing much more of the world next year. Thanks for your comment!
That Steemfest will be a ball! Vote for Steemfest 2 in my town of Krakow, Poland! Poland has more crypto-coins than any other European country. This all sounds like a new post rising within me already! Yippee! Safe travels.
Thank you, @mindhunter! It was all so much fun. Hard to believe it's been almost two weeks already!
I think many Steemit hearts are already mewing for #SteemFest2! :)
I've got a lovely pic of my Easyjet flight home from Spain with a killer quote to go with it coming v.soon. Watch the skies my friend ;)
Hi @ericvancewalton, I just stopped back to let you know your post was one of my favourite reads yesterday and I included it in my Steemit Ramble. You can read what I wrote about your post here.
I'm very flattered, @shadowspub! Thank you!
You're welcome @ericvancewalton .. .really nice piece.
a really practical and realistic approach to writing as a career. Liked your attitude :)
Thanks, @johnjgeddes! Thanks for reading and commenting!
you're very welcome, eric. It's an excellent resource
Thank you for laying out the reality of something I am being forced to contemplate doing.A good, sensible , plan.
You're welcome, @awgbibb! I hope it was helpful!
I may be adopting you as my mentor. :) I have always been frugal, and it comes with the double edge, that once you've cut a lot of corners, there aren't that many left to cut! It's always good to hear stories of folks that have succeeded at what you (I) want to do, though. Your poem from a couple of weeks ago was very inspiring as well...Thank you!
I hope you found it helpful @uniwhisp! True, frugality can be a double-edged sword. Sometimes I get too emersed in that mindset and have to remember to reward myself. I think it's important to celebrate life's little victories. Thanks for your comment!
Hi @ericvancwalton
Great and practical advice. I always believed that if you don't have the cash to by an item (excluding your house and maybe your car) you must leave it. Don't buy on credit.
The most wonderful thing of going it on your own must be that you can do what you love as and when you desire. For us working for a boss these days are almost like slavery, you must be available 24/7 and with modern technology you are reachable where ever you are any time of the day, and of cause you don't want to loose your scarce job.
Thanks, @rynow! I'm glad you connected with it. You're 100% correct, about technology blurring the line between work and personal life. I remember in the 1970's they told us in elementary school that by the time we were in the workforce the work week would be about 20 hours because of technological advancement. They couldn't fortell the degree to which greed would kick in. Now the work of 3 or 4 are squeezed out of 1 person. Entrepreneurship is a hustle too but you have the power and flexibility to create multiple (and passive) income streams that give you far more freedom. Thanks for your comment!
Good advice there, thank you.
I'm exceptionally fortunate in that my husband supports me in my writing. I have a number of books Indie published but as you point out, it's difficult to get a regular, reliable income from indie writing.
Good Luck in your full time writing career, it's great to be able to watch a success story unfold before our very eyes, I sincerely hope you make it.
Thank you! It's is really tough to make a living from books these days. Thankfully there's many other income streams for us these days. I appreciate your kind words, @michelle.gent. There was a time not to long ago when I was beginning to doubt success would ever come my way, now I'm much more hopeful! Steemit has played an incredible role in that. Take care and best of luck to you as well!
Yet again wonderful advice for creatives (visual artists too)!
Thank you, @storyseeker!!
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