posted
Just a fantasy, but lets say you sold a novel for an advance the equivalent to 80% of your current salary.
Do you:
a) Spend the cash on new car, holiday, home extension/new house, etc.; write another--spend that too.
b) Put it in the bank, continue with your full time job and write another in your spare time, hoping one day to be earning enough from writing that you can stop your day job.
c) Give up/take a years break from your job and use the money to support you for a year's full time writing? You hope to write two or more novels in that time.
[This message has been edited by skadder (edited December 23, 2009).]
posted
How about 1) spend some time (1 to 2 months) promoting the book. Most publishers would love that, it would likely promote sales and create a greater chance that a second book would be published
2) Take one day a week off and use the time to get an invention going (we writers are naturally creative
posted
There's a hidden bit of math missing from this question: Was this your first sale? How long did the novel take to write? Less than a year? Or seven years? How much of a person's current income is saved, living expenses or lifestyle? Without disclosing or defining all of the above can such a poll be useful?
Still, I'll venture some thoughts. Say the novel was written over one year, part-time, while working full-time, paying off a mortgage and supporting a dependent spouse, two school age kids and a toddler and with zero savings (an identifiable situation for many, I'd imagine). At which point I see this as more of a risk taking poll than anything else.
For example, I'm not a big risk taker. So I'd probably vote for (b) - I'd put it in the bank (mortgage). But I'd go further; I'd think wow, this writing gig is actually taking off and I'd keep doing what was proven to work - writing and working at the same time - until my mortgage was paid off.
Which then gets me (eventually) to the no mortgage(/debt) situation, which tips me over the risk-taking threshold. I like to think in this situation I'd take the riskier option (c) and devote my full time to writing. The hours I used to spend working full-time should result in at least more writing output to match the old full-time salary. And without a big debt to pay off, even if it didn't, my expenses would be much lower than they are now.
But then, that's based on a novel written in a year. If it took seven years, and that's all I wrote, I think I'd stick with my day job and probably blow it all on (a).
[This message has been edited by BenM (edited December 23, 2009).]
posted
Forget the bank. They seldom pay interest and their service charges drain away your money even if they do. Put it in a GIC instead.
Posts: 16 | Registered: Oct 2009
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posted
Well, my notion always was that if I sold that first novel, I'd try to stick them with a second one before they realized they'd bought a turkey.
Aside from that...bank the money you earn, you'll have to pay the taxes on it yourself, and until you do, don't touch it.
posted
80%? First thing I would do is to take my Mom out for a really nice evening on the town. Then I would go see my daughter in Hawaii, (she's a Marine). Then my son... for two weeks straight.
I personally would dig in deep and try to produce more of the thing that brought me the payoff. I would fix my old worn out stuff, car, etc. and keep going with what was working. Granted, I don't have any of the financial attachments presented by BenM so surviving on this type of advance would not be a hard thing to do. I would try to get as many 'magic pies' on the shelf as possible and spend a great deal more time marketing the 'pies' I already have. Yep, Yep... Doug
posted
I agree with Robert. First thing I would do is talk to the H&R block people. Then when the tax money is safe in a CD earning interest, I would put the rest to work paying off my husband's student loans. Let's say that there is a bit more left after that, I would buy myself a laptop, and then put the rest in paying down my mortgage.
It will be my third book I sell that makes me go crazy and start just spending. So watch out for that one, I'll be the one throwing money in the air.
posted
goldhawk - not sure where you are located but, while interest rates on savings happen to be very low at the moment, in my experience (in multiple countries) you can at least get free banking pretty easily. The early days of banking - when there was no such thing as interest to the depositor, and the bank did indeed charge for the "security" of looking after your moeny - are long gone and unlikely to return. Nowadays banks need to encourage deposits in order to get the money to make loans (since the loaning out of money for interest is the wya banks actually make a profit).
Assuming this s a first sale, the sensible things to do are as follows: 1). Calculate the tax you'll owe and put that amount of money somewhere secure and make damn sure you don't touch it. 2). Treat yourself to something you've always wanted 3). Carry on with the day job until you've sold your fourth or fifth novel. Maybe then, when you're over the mid-list career "hump" (if you haven't made it to significant sales by book three or four, there's a good chance your publisher will drop you), you might have an income stream steady enough to make a go of writing.
posted
1) Pay off the cars 2) Knock out a chunk of student loans 3) Forget to file 1099 tax form 4) Get slapped by the IRA in April 5) Cry like a baby 6) Sell next book to make up the difference 7) Repeat from step 3
Posts: 487 | Registered: Mar 2008
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posted
Note: remember that you are usually paid that amount in thirds, not all at once.
1) PAY MY ESTIMATED TAXES and/or increase the amount of money being withheld from my current salary to make sure I'm not hit with huge fines for not having paid the IRS enough (since I'm assuming I'd be popped up a tax bracket by the additional income). Also talk to a tax advisor.
2) Buy myself something nice as a reward.
3) Buy select family members something nice, in appreciation for them supporting my writing.
4) Get back to work.
I am not a risk taker and don't work in an industry where you can quit or go part time and then get back in again a year later if it doesn't work out, so I would not quit my job until I knew
1) My advance had earned out and I was going to earn royalty monies.
2) I was going to be able to sell another book or two and wasn't a one-hit wonder.
#2 is closely related to #1 b/c if my advance earns out, I expect the publisher to be more interested in buying another book from me because I'd more than paid for the cost of publishing me. I know way too many "mid-list" authors who can't get their books published right now because their previous books didn't do well enough or the diminishing returns on their series means the publisher doesn't want to risk doing another book in that series.
Basically, one book sale is AWESOME, so I'd build myself a nice little nest egg and wait to start counting my chickens....
posted
In this fantasy, I have a salary equal to or greater than what I made in 2008. The few thousand remaining after I visited family and paid off my car loan (a) would go in the bank (b).
*Edited for a typo.
[This message has been edited by aspirit (edited December 23, 2009).]
posted
Hmm... if the 80% is before taxes, then I wouldn't have any money left to deposit in the bank. In that case, I would throw some money at the car loan and keep some for emergencies.
Posts: 1139 | Registered: May 2008
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posted
My first step will be to become a master of how my new source of income affects my tax filing process.
Step two: sock some of that money away.
Step three: remind my kids that the person who wrote the novel gets to decide how to spend its earnings. Seriously. My kids have already told me what they're going to buy with my advance. My response: "I'm thinking of a number between 'one' and 'no way in hell.'"
Step four: I will visit one of my favorite 'places of power', plop down with my notebook, and write about whatever drifts into my mind. Curious, most of my most inspirational 'places of power' are eateries; Hooters and Waffle House, frighteningly enough, are two of my best places for inspiration writing.
Kinda cool how my writing earnings will lead right back to more writing, huh?!
posted
One of my favorite of my own horror stories includes a dinner thats based on a Waffle House. I find Waffel Houses to be scary, disturbing and intriguing in atmosphere. They are like the real-world manifestations of every creepy roadside dinner in a middle-of-nowhere horror movie or story ever written.
And they're always open! And there's always people IN them, no matter how late it is! So many little black shadows moving around in the gold light from inside... what horrors do those night-dwellers have to share. Or worse, what chilling thoughts do they think about us day-breathers?!
quote:I know way too many "mid-list" authors who can't get their books published right now because their previous books didn't do well enough or the diminishing returns on their series means the publisher doesn't want to risk doing another book in that series.
Sounds like it's really important to make sure the first novel is a cracker.
posted
I'm with Robert on both paying the taxes and having another novel I could shoot their way. Also, I'd invest much of it in an aggressive ad campaign. Go to some bookstores in larger cities, give signed copies to the managers and some of the employees to recommend it. Look into TV commercials, etc...
Posts: 3687 | Registered: Jan 2007
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Then I would get a nice paint job on my car, upgrade to front disc brakes and get any other little things fixed. On a car that's thirty-seven years old there are always little things that need fixing. I'd probably spring for new, headlight bezels that aren't cracked.
There's a good chance that I would take a big trip somewhere. The next up on our list is a Silk Road trip from Turkey, through the 'Stans and back through China.
The rest I'd put away and probably go to a four day work week so I could write more and get the next book out.
posted
Right now I work and write on the side. If I had 80% from my first novel, and a prospect to sell another, I'd probably work part time and write more intensely. This assumes, of course, I have a publisher willing to go along with a second book.
Posts: 496 | Registered: May 2009
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quote:-------------------------------------------------------------------------------- I know way too many "mid-list" authors who can't get their books published right now because their previous books didn't do well enough or the diminishing returns on their series means the publisher doesn't want to risk doing another book in that series. --------------------------------------------------------------------------------
Sounds like it's really important to make sure the first novel is a cracker.
Nope. It's really importantt to make sure the THIRD novel is a cracker. Publishers will expect your third novel to sell MORE than your first. If sales diminish, they'll drop you. I know people this has happened to, and people it hasn't (because sales have held up).
The other good option is to make a three-book deal with publisher Z, then another with publisher B, then another with publisher C... it can be done.
posted
1st pay taxes. With what is left over 50 % goes into savings. 35% will be invested into promoting the book and general writing expensives. The last 15% will be used for fun, like whisking my husband away for a week in Hawaii. Posts: 1102 | Registered: May 2009
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I'm not the primary wage earner so I have a bit more freedom. I'd pay off debt and then put the rest toward the mortgage. Then I'd quit my four hour a week day job but keep the piano lessons going. (I like doing that anyways) My most time consumming job, staying home with the kids, I can't quit. But I would plan on staying home and writing once they are all in school.
posted
Yes, I would, but I'm the secondary income these days, so I have that leeway. I'm dying to have an excuse to not do so much consulting, but I also recognize that I need a healthy dose of self-discipline and a regular writing routine to keep myself honest. I'm dying of curiosity about what it's like for mainstream writers who are doing well, publishing at least a book or two a year (or more, I write in the YA/mid-grade range and feel that those writers put out more titles per year.) How many hrs/week are spent writing, versus other writing tasks like editing, business management, bookkeeping? How big is the range? Are some writers making it work at 25 hrs/wk and others at 80? What's the difference?
Anyway - that's part of my fantasy. For me, though, if we got such a great windfall, first priority would be a big trip. Then tuition for the kids. Everything after that gets put away for a rainy day.
posted
If I got an advance equal to 80% my salary I'd ask what I did to deserve such an insult. I don't think there is a company out there with an advance that small. So I'd probably go out and buy a candy bar. (I do hyperbolize a little.)
In the spirit of the thread I'll assume I'm making more than the pennies I find under the vending machines at work.
I'd probably take some time off to promote my book and after making sure I have some sort of cushion I'd probably go to DisneyLand and try to sell more novels. But I wouldn't quit until I get rolling.
posted
80% of my salary would pay off my mortgage and my credit cards, so I'd be debt free. I'd keep my day job, saving the extra $$$ that isn't paying off debts any more. I'd study Dean Wesley Smith's site to see how to get more $$$ out of my magic pie. I'd work on my next one.
Posts: 406 | Registered: Mar 2007
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posted
I would take care of taxes first, and then plan to promote the book, timing my city visits to events I want to see in those cities. I would also get a fully loaded laptop with accessories and extra batteries, so I could continue writing. OF course, I would keep my day job as I have the bosses well trained........ Most of it would be socked away, though. Need savings, need a buffer.
Posts: 1008 | Registered: Feb 2006
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posted
At this stage I would first use all the after-tax money to pay down my home mortgage (cars and credit cards are all paid off, else they'd be first in the hopper). Then in the future I'd sit on the vast majority of any after-tax money derived from writing. After I accumlated ten years' salary in writing revenue, with my house paid for, I might think about other options.
So a variant on b) is my choice.
[This message has been edited by dee_boncci (edited December 24, 2009).]
posted
I don't want to steal the thread but after reading all these replies I got the strangest feeling. Mortgage payments, car loan payments, credit payments... What are you all talking about? My father paid for the house we live in (well, not anymore, I moved out four months ago) in cash and he is not the richest of people. Why complicate your lives with loans if you don't have to?
Posts: 1271 | Registered: May 2007
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posted
Dunno where you are, but in America the vast majority of people arent financially able to buy a house with cash.
Posts: 2626 | Registered: Apr 2008
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posted
It depends a lot on the area where you live within America, too. My parents' house is near, but not in, a big city. It was worth about 100K when they bought it 25 years ago. Now, because of inflation and suburban sprawl, it's worth more like 750K. Same split-level house. Same lot. No major improvements. Just the insanity of housing costs on the rise.
I also lived on the outskirts of London for a while. Don't even get me started on the costs of housing there!
I can't afford to buy a house (in either country) for many more years, even with a mortgage. If I waited until I had the complete purchasing price on hand, I'd be buying a house for my grandkids to live in! :-)
posted
Well, my dad didn't buy the house without saving money first. He's been saving it for 10 years but he didn't have to pay any loans or mortgages that would eat away his budget. I plan to do the same.
Posts: 1271 | Registered: May 2007
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posted
A great many people, such as my parents, myself, and almost everyone I know personally, also don't have the financial ability to save meaningful amounts of money.
The fact remains that the fast majority of people at least in America purchase homes via mortage, and in my experience thats because most arent able to do it otherwise, not because they are knowingly choosing a more difficult path or something.
posted
I'm not trying to judge anyone. I'm saying there are plenty of ways to save money or simply not wasting it.
Sometimes when I turn on the TV, I see American shows where I can see what kind of cars Americans drive. No offence but it is possible to do the same mileage on a normal sized car.
posted
But getting back into the spirit of the thread. I like KayTi's idea of saving for a rainy day...since the first thing I would do is buy me three acres in the Hawaiian rain forest and every day would be a rainy day, even if just a few minutes of afternoon showers Of course, if all goes well I will be doing that before the spring anyway, book deal or not.
Posts: 710 | Registered: Oct 2009
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posted
I'd say go with C. But I'm a big risk taker, and I don't need much to get by anyway. If Burgess can write five novels in a year, then you can crank out two.
Of course, it also depends on what your wife/SO says.
quote:I'm not trying to judge anyone. I'm saying there are plenty of ways to save money or simply not wasting it. Sometimes when I turn on the TV, I see American shows where I can see what kind of cars Americans drive. No offence but it is possible to do the same mileage on a normal sized car.
Please don't think that everyone in the USA lives the lifestyle you see on TV.
A lot of Americans are irresponsible with debt, but taking out a mortgage to buy a house is usually a good idea.
Where I live a modest house runs about $250,000 and the average income is around $50,000 a year. If you somehow saved $10,000 a year, it would take 25 years to buy your house. In the mean time, you spend about $1,500 a month on rent which is equivalent to a mortgage payment.
The average mortgage is 30 years, but if you pay an extra $200 on the mortgage every month, you can pay it off in 20 years or less.
So you can pay your mortgage off in five less years than it takes to save up for it, and the entire time you can live in your fabulous house instead of a crapy, small, over-priced apartment.
That is why most of us go the mortgage route to buying a home.
[This message has been edited by MAP (edited December 24, 2009).]
posted
In my area rent is just about the same as a mortgage payment, so it's a choice between paying for someone else to own a house or paying for yourself to own a house.
I don't know about everyone else but this dreaming has got me motivated to submit a little. I need to finish that novel and send it out. I also need to look through my files and dig up some old ideas. Ah the joy.
posted
I'd like to take the money, convert it to cash, make a big pile on the floor, and roll around in it. But there's not that much money involved in selling a first SF novel...besides, the last time I did something like that, I never did find that twenty...
Posts: 8809 | Registered: Aug 2005
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posted
On houses and mortgates---good idea if you can afford it, bad idea if you can't. I own my house outright now, but that was twenty years of payments or non-payments---which would have meant real trouble if my parents hadn't held the mortgage and let me slide a few times. It was a thirty-year deal, but last year my parents forgave the debt (it didn't make economic sense to carry on, though I was ready).
And, of course, my house is worth a lot more than what I paid for it twenty years ago---but I'd have to sell it to realize that, then buy another house for that same price or somewhere right 'round it.
posted
I am a sahm, so I would view the money the same as any other windfall- 1) pay off student loans 2) stash some in savings for the little one's college and 3) fun crazy stuff. And then get to work on the next book. Of course, the 80% of current salary would leave me making essentially nothing (I pick up some part time stuff here and there so my current salary is not quite zero). I don't think the money would be enough to put kid in daycare to focus on writing though.
Posts: 303 | Registered: Mar 2006
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posted
MartinV, it's very different here in the US than elsewhere in the world. In many of our communities, there simply aren't very many reasonable and affordable rental properties (or there are only really cheap/ugly/unsafe rentals.)
Our society is built around car travel and car ownership, so no matter where you live, big cities and a few larger towns excepted, it's pretty challenging to get by without a car. Our cities' public transportation systems range from acceptable to marginal, some don't even have reasonable public transport, or only one mode such as buses.
It's frustrating to travel to other countries and see what options are available, however it's also possible for an average American to own their own home which is not common in many places in the world. My parents have five children, and all of us are homeowners and have been for years and years, many of us on our "trade-up" homes that we purchased after owning a smaller place/investing in upgrades and fixes, watching the real estate market for the right timing, etc.
True, there are many economic problems caused by people who couldn't actually afford to buy a home doing so in the last 5 years, and then defaulting on their loans (the so-called "toxic assets" that are in the news on and off.)
But on the whole, homeownership is a normal thing in the US, and almost no homeowner purchases a home outright, the very very wealthy excepted. Many in my parent's generation have reached the term of their loans and own their homes in the entirety by now, but most people I know have a mortgage payment just like other monthly responsibilities of gas (natural gas is used in my area to heat water, cook on the stove, and for home heat), electricity, phone, etc. It's the largest of these monthly responsibilities, true, but it's better than paying rent where we'd have no asset (a house) in return.
Sorry for the digression, but I think these kinds of cultural exchanges are valuable, and I, at least, would be eager to hear about how life works where you live. Is homeownership common? Do most people you know own or rent? Is it age-dependent? (e.g., young people in their 20s rent or live at home, it's only those over 30 who buy...) Who owns the rental properties? (regular people or big companies?) Are rental standalone homes common or are they only apartments? Do most people live in apartments? Here in the U.S., I don't know for certain, but I imagine that the majority of the population lives in single-family homes (I'm sure this is out on the bureau of labor and statistics website somewhere, but haven't looked.)
Back to the topic, I personally wouldn't pay down my mortgage much if I hit a windfall, the tax benefit we get from the interest payments on the mortgage offset other things in our budget. Saving for college/putting money away for emergencies is much more important for us at this point in our life.
posted
Kay Ti- in my neighborhood, a bus would be an improvement. I would have to drive about ten miles to find any sort of public transportation. When we bought our second car, we figured out that we would save enough in gas to pay almost 2/3 of the car payment (plus saving nearly an hour and a half a day in drive time). We worked on opposite sides of the city at similar times.
Posts: 303 | Registered: Mar 2006
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posted
I'm totally with Brendan here. If the author doesn't promote his/her own book, the chances are very good that the publisher won't bother much doing that. This is quite simple: they have many books in line, waiting to be promoted, and one can only do so much for most. From what I understand, many publishers even send very few free books out for reviews; these can be counted on the fingers on your hands. What your first act as a published author should be is to send a couple of hundred of your books to the review sites. There cannot be a better investment.
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