In the comments yesterday on the Why Am I Not in STEM? post, we got into the topic of writing as a career. It is not known as a particularly stable or high-income line of work.
However, it’s not inherently grim. People who call themselves writers do not, on average, do badly. According to the BLS, there are 41,990 Americans who call themselves “writers and authors.” The median (50th percentile) annual income is $55,940. The 75th percentile is $81,200, and the 90th percentile is $117,860. To be sure, some would do less well than average, but the 25th percentile is still a non-poverty wage at $39,050. Things could be worse!
Some years I’ve done better than others, but even with my sanity-keeping requirement that everything I take on have some career boosting element, I’ve done OK. In order to make a decent living writing, I think of my work in four categories.
I aim to have about a quarter of my income come from steady gigs. Right now, I’m writing for Fast Company. In the past, I wrote for CBS MoneyWatch. I had a contributing editor gig with Reader’s Digest years ago. To be sure, the particular nature of my main steady gig has changed frequently — which I guess means it’s not truly “steady” — but on the other hand, some people change their real, W-2 jobs every 2 years too.
In my mental system, another quarter comes from advances on my books such as Mosaic, What the Most Successful People Do Before Breakfast, All the Money in the World, and 168 Hours. Book income comes in chunks over a long time. You get some chunk on signing the contract, some chunk on manuscript delivery, some chunk on publication, and often some chunk with the paperback. These things can literally all occur in different calendar years. So even if you get a decent advance for your first book, you probably don’t want to quit your day job, since you may only get 25-33% of that advance in year one. On the other hand, if you write more than one book every 3 years, these payments start stacking up. In 2013, I got the paperback payment for All the Money in the World, the on-pub payment for the WTMSPDBB paperback, and the first advance payment for Mosaic.
Here’s something else that happens with books: maybe some will “earn out.” That is, you start earning royalties beyond what you got in the original advance. There’s an argument that you shouldn’t be happy about this, because you want to get all your cash up front — kind of the same argument that says you should be unhappy about a tax refund because it means you loaned Uncle Sam money. Rationally, this is true, but in practice, everyone loves a windfall! The before breakfast ebook is in that position now, and some other projects will be there soon. I get royalty checks every 6 months. Yay!
However, I haven’t really built royalties into my income targets up until now. Another quarter of my income has come from big side projects. In the past I’ve co-authored books (“by so and so, with Laura Vanderkam”). I’d put my Philanthropy Roundtable books in this big side project category. Over time, I see the royalty category being substituted for this category, so my commercially published books will represent more like 50% of my income.
The last quarter is “other.” Articles for various publications (USA Today, Fortune, City Journal, etc.). Speeches. Being the voice talent on my audio books. There’s a lot more one-off stuff in this category. Sometimes in a year I have 10 or more 1099s that fall into the realm of “other.”
The mistake many people make in writing careers is thinking that category 2 (book advances) or the articles in category 4 should constitute 100 percent of their income. It can work, but it’s not easy in the first few years. Articles alone are always going to be hard to make work. You can place 6 major magazine features a year, but if each is going to top out at $7500 that’s still only $45,000. Not pocket change, but not awesome. And a lot of magazine features are shorter. Many end up at $800-1200. Speaking is a more efficient way of making money but it’s a business line you have to grow like anything else. It also tends to correlate with category 2 and 2.5 (royalties). If you’ve written a book that’s turned into a great success, chances are people will pay you to speak about it.
Obviously, this all involves more hustling than collecting a paycheck every 2 weeks, but by keeping this mindset on income categories, writing can be a decent career. I wouldn’t discourage my kids from doing it. Then again, my kids may decide that they want to be writers, but only want to write sonnets about plants. We’ll see how that pans out.
ADDENDUM: Thought I’d throw a “sources for stories” bit at the end here. I’m looking to write about accountability partnerships and accountability groups. Have you accomplished something big — or are you working toward something — with the help of an accountability partner? Please let me know: lvanderkam at yahoo dot com.
9 thoughts on “The economics of writing — or how to write for a living and not starve”
Don’t forget that until recently, it was difficult to get benefits like health insurance in the US with a freelance writing gig (unless you had a spouse or day-job with benes). Job security isn’t the only stability missing from free-lance work.
One nice thing about the ACA is that it seems to be allowing guilds to put back benefits that they had to drop when the increasing costs of health insurance put their plans into adverse selection death spirals (aka: only really sick people wanted insurance that cost that much, increasing the cost more, so they stopped being able to offer it). Another place for free-lance folks to get group insurance besides the exchanges.
Scalzi has some very nice articles about writing copy for companies, which he used to get his bulk paycheck from before he hit it big. There’s a lot of paths to commercial writing.
@NicoleandMaggie- I’ve belonged to various groups that offer health insurance – Freelancers Union had it, and I bought it through them for about 2 years. Was the usual winners and losers issue – this was in NY state, which was a guaranteed issue/community rating state. So I paid a lot more as a 24-year-old than I would have other places. Someone who was older and had health issues would pay a lot less than they would other places (if they could get coverage).
When did you get it? Guild insurance used to be more prevalent but has been increasingly dropped. The small business insurance I could have gotten right after graduation (had I not been married) before my real job no longer exists (and I’m not *that* old), though something similar may come back with the ACA.
Guild insurance has also been more prevalent places like NYC or Boston or LA, and less prevalent in places like The Entire South. So you had to live someplace expensive with a lot of people who have the same needs that you have, and even then the ability to get guild insurance has been steadily eroding this past decade or two and the costs have been increasing.
Even farm bureau insurance has been eroding rapidly as small farmers are displaced by agribusiness and small businesses are more likely to have adverse selection problems.
Many parts of anybody’s life have been unique to their circumstances and don’t apply to the broad majority. Unless all freelancers live in NYC, which is an unusual place in an unusual state.
I’d second what NicoleandMaggie commented about writing for companies. I find corporate writing to be far, far more lucrative than other freelance options (if I worked 40 hours a week I’d be well into 6 figures annually) but that could just be my impression since I haven’t ever tried the track of publishing under a byline like you do.
Your point about books is a good one – I’ve often thought about how to come up with passive income streams (like additional book sales after you’ve already written it) to increase my income. That may be the downside to the sort of writing I do–there isn’t an easy way to build royalty-type earning into it.
@Catherine – yes, it’s the usual risk/reward trade off. Corporate and technical writing often pays decently but then the payment is all there is. A book written under your own name may take longer but then there are royalty possibilities, speaking, etc.
Great information listed here. As a former Executive finally taking that leap to professional writer, I appreciate some expectations of the “un-mentionable” in less direct ways.
It seems like in any other endeavor writing is deemed above talking about.
I liked the way you segmented the various income streams.
I’m adding blogging, writer.ly gigs, “coaching”, and self-publishing serial story lines to my list in the “other” category.
My goal is to help folks raise consciousness through my creative insights and work, primarily through writing and via my blog. This writing is part self-development, part poetry, part fiction, part non-fiction. It helped to see you segment your financial world with various streams of income to match the disparate nature of our work.
Also, I’ve done a great deal of study on accountability and a science built upon the quantified self if your are interested in having a conversation. Look up “pre-commitment” theory and check out the website stickK (yes with two k’s)
I think someone who is focused and determined to make a career out of something, who’s smart and has some talent in that area, can do very well even in areas not traditionally seen as good income sources.
I have a few artist/maker friends in Seattle who are doing this, but like you they have diversified their income streams. They make money on their artwork/crafts (via several channels online and in real life), but they also teach classes, write, speak, etc. It’s a LOT of work, but they are happy and it shows.
I’m going to throw in here that an additional income stream can be created with self-published books (depending on whether or not you have a traditional contract, and what it says). With much higher royalties (Amazon is paying them out monthly now, too!), self-publishing represents an excellent option. Like the other categories it may not be enough alone, but it can certainly be part of a well-rounded plan.