Mark Terry

Tuesday, January 04, 2011

Passive Income

January 4, 2011
Something totally unexpected happened to me yesterday. I received a royalty check for the nonfiction book I co-wrote that came out in October. The fact that there were royalties to be had for me on a book that just came out in October says both something about the publisher and the success of the book in a very short period of time. It was a nice check, not earthshaking, but larger than I expected and I wasn't expecting it at all.

Partly I wasn't expecting it because I wasn't paying attention to the royalty schedule. Another reason I wasn't expecting it was because in many publishing contracts, you don't receive royalties until a full royalty period has passed, which is often 6 months (yes, boys and girls, if you want money from writing a book, get used to a twice-a-year paycheck, or someimes four times a year).

Anyway, go me.

Which isn't exactly the point of this post. I've been thinking a lot about what is sometimes called "passive income" for writers. That is to say, I write many things that are work-for-hire, which means I write something, I get paid, I cash the check, I'm done. That's fine. Works well for me, for the most part.

Even most of the books I've had published have not really resulted in significant royalties. There are a number of reasons for that, but slow sales and an inconsistent publishing history are two of them. Slow sales are obvious, I think, but an inconsistent publishing history may not be.

What I mean is, I would publish a book, then I wouldn't have another one come out for a couple years. They'd go out of print or just sort of lie there, fallow. Then I'd start all over again. Hopefully these days I'm publishing at least a novel a year. Thanks to e-publishing, more than one a year, generally speaking (I'll get to the e-publishing thing in a moment). When you publish at least one book a year, the new books generally help promote your old books, AKA backlist, so you get some money coming in on royalties (hopefully). That's nice, because you didn't actually do any work, but it brought in money anyway. Yay!

Which is one of the interesting things about the e-books I've got out--they seem to be growing, they bring in money direct-deposited to my checking account at the end of each month, and although to-date it's not astonishing money, I actually am using it for something. Recently I'm depositing it into my retirement account, although I've used it to pay bills or buy stuff in the past.

It's nice to move a bit off the work-for-hire treadmill and I think it's a worthwhile thing for writers to push toward. Advance checks and work-for-hire projects are fine and I don't have plans to move away from either of those fully, but it's quite nice to receive money--again!--from a project you finished quite some time ago.



Anonymous Eric Mayer said...

Some of the anthologies Mary and I have contributed to are still in print. In particular, the first anthology we contributed a historial mystery to - only about 2,000 words long -- back in the early nineties, remains in print or did until recently. So year after year we get tiny royalties. Over time we've ended up with far more in royalties than the original payment. A couple years ago we had a royalty of something like 37 cents. Poisoned Pen Press keeps all its books in print so we get a long royalty statement with however many of our hardcovers haven't yet sold out, a trade paperback for each, and a raft of electronic and audio versions, most of which sell practically nothing right now but still add up to free money, and who knows what might happen in the future? Hey, getting money you can hardly remember working for is way cool!

9:17 AM  
Blogger sex scenes at starbucks, said...

I'm wondering if I should self-pub as an experiment. I have one book in particular that could make a series, and then it could build on itself, maybe... Hmm. More thought required.

11:33 AM  
Blogger Natasha Fondren said...

For me it's always been a war between need-money-now and trying self-publishing. I mean, the need-money-now eventually brings in royalties, but less than I would have gotten if I self-published. If I don't write a book this month to be self-published, I'm going to kick myself.

5:49 PM  
Blogger Jon VanZile said...

Ha ha. We're on the same page ...

I've been freelancing now full-time for about seven years. I've had some very good years and some very bad ones (this last one, fortunately, was my second best ever). But the hamster wheel is grinding. So this year, all of my career resolutions have to do with passive income—and that has to do with a body of work.

So ... this means a few things for me, including devoting energy to a few projects that won't yield any income for a while. (Which explains my near-absence on the Internet these past few months). My goal, ultimately, is to pursue three different avenues to generate passive income. We shall see. We shall see.

But, definitely, I realized it's time to start thinking about life after hustling for work all the time.

5:48 AM  
Blogger Mark Terry said...

I just read your blog post today. I think we're very much on the same page here. And like you, 2010 was a very good year (2009 sucked) and that may be part of it, some way to make the bad years a little bit better.

6:57 AM  

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