The Realities of E-Publishing

jnfr said:

I was told recently that about 1000 fiction writers actually make their full living writing fiction, in the US. That sounds very low to me, but I have no idea how you would find out the truth.

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Dean Wesley Smith talked about this on his blog.

Somehow, I think the total is substantially over a thousand. But I would mistrust anyone who says they know how many, because... Far as I know, there's been no actual survey of every writer to find out. So anyone spouting total numbers is guessing.

The problem is "make a living" varies a lot from person to person. How many people is the writer supporting? What's the general cost of living where the writer lives? What if the writer is married and his or her spouse has a regular income from a day job?

James D. Macdonald said:

And if you expand the definition to include lawyers (because lawyers write an awful lot), then even more do very well indeed.

But let's stick with book/magazine freelancers, okay?

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And if we expand the definition of writers to include scientists (because "publish or perish" and all those journal articles don't write themselves)....

Well, yeah.

jnfr said:

I was told recently that about 1000 fiction writers actually make their full living writing fiction, in the US. That sounds very low to me, but I have no idea how you would find out the truth.

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That sounds low to me, too. Especially since the way I heard it, it was 5,000, and that also seemed low to me. Given that two of them live in my house, and I know several others, either I'm a statistical outlier, or there's something fishy with that number.

jnfr said:

I was told recently that about 1000 fiction writers actually make their full living writing fiction, in the US. That sounds very low to me, but I have no idea how you would find out the truth.

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That does seem low to me as well, but how do you define what 'a living' is? I'll make enough this year to match my day-job salary, but I'm not quitting my day job because I need to make twice as much to cover benefits, health insurance, taxes, etc. So it's a 'living' but it's not.

Also, cost of living comes into play. Spouses with jobs comes into play. A single person living in Canada (free health care!) might have a very, very different cost of living than a writer with a family that lives in, say, California or NY.

Irysangel said:

Also, cost of living comes into play.

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Ability to reduce cost of living comes into play, too. Whenever your career focus is more on doing what it is you want to do, and less on earning as many dollars as you can, a little bit of "right sizing" helps a lot.

I think in the U.S. it's also very important to think about health insurance and retirement.

An awful lot of the writers I know in three separate fields—genre fiction, consumer technical, and textbooks—have a spouse with a day job, or they have a day job, entirely because of insurance and retirement / pension benefits, direct and indirect.

This is especially true when you think of the potential to live to 90 or more. A spouse or a job with health benefits after retirement is a huge asset.

Health insurance for writers and other self-employed people is available; it's prohibitively expensive, and typically, while it doesn't suck, isn't fabulous. High premiums and deductibles and less than stellar coverage is typical.

If you've got pre-existing condition, say diabetes, a heart problem, previous cancer, lupus, etc. it's dismal even finding coverage. It's possible, but you're not writing while you look.

You can save for retirement via SEP IRAs and other means. Even if you have as spouse with benefits, writers should max out a retirement if at all possible, as well as a spousal IRA, and take advantage of things like medical savings plans.

If you have dependents, it gets even hairier.

So an awful lot of writers keep a day job or a spouse does, just for the benefits.

Medievalist said:

I think in the U.S. it's also very important to think about health insurance and retirement.

An awful lot of the writers I know in three separate fields—genre fiction, consumer technical, and textbooks—have a spouse with a day job, or they have a day job, entirely because of insurance and retirement / pension benefits, direct and indirect.

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Insurance is huge. However, most folks in most jobs don't get pensions. They're great if you can get them - but most people can't. Saving for a retirement (investments, really) is a more likely solution for most. Ex: My wife and I own our house, and have about $300k in assorted investments. That's actually not too huge given that we're in our late 30s - to be in great shape, we'd want more than that invested. But we're still down a bit from the recession (which hit most stocks pretty hard), and paid a lump sum $75k to finish paying our house (worth it - interest on mortgage was substantially higher than returns on those investments).

Health insurance for writers and other self-employed people is available; it's prohibitively expensive, and typically, while it doesn't suck, isn't fabulous. High premiums and deductibles and less than stellar coverage is typical.

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Not usually true. We pay about $12k a year for our family insurance, two adults + 3 kids. In return, we get much better coverage than offered by most places I've worked, for about twice the cost (most places I've worked have the employee pay in about half that for family plan coverage). In our case, moving from job to job periodically, keeping our own premium up means not having to worry about changing insurance every couple years.

If you've got pre-existing condition, say diabetes, a heart problem, previous cancer, lupus, etc. it's dismal even finding coverage. It's possible, but you're not writing while you look.

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Some states prevent this (where I live, in VT, it's never in my memory been legal to deny coverage for pre-existing conditions). But the federal health care bill actually shuts this down on a national level. Assuming Republicans don't manage to shut it down, in 2014 no medical insurer will be able to deny a US citizen insurance on the basis of pre-existing conditions.

But overall, yeah - having a good understanding of financial planning is important for anyone running a small business, writers being no exception!

KevinMcLaughlin said:

Not usually true. We pay about $12k a year for our family insurance

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Hmm. Last year I earned just over $10k. So 'expensive' is subjective.

shadowwalker said:

Hmm. Last year I earned just over $10k. So 'expensive' is subjective.

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Fair enough! I used to earn in that range too, once - and back then, health insurance and saving for retirement were a lot less critical to me than roof over head and food in stomach.

KevinMcLaughlin said:

Fair enough! I used to earn in that range too, once - and back then, health insurance and saving for retirement were a lot less critical to me than roof over head and food in stomach.

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Critical is also relative. If you get very sick the lack of insurance is suddenly critical. My options are basically 1) maintain a salaried position with benefits, or 2) go back to New Zealand. It is nice to have a fall back option....

I live in Canada

Only dental is a bitch.

Capital said:

I live in Canada

Only dental is a bitch.

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and you pay for prescriptions. And for eyeglasses.

and you might just wait a few months for a procedure it'd take a few weeks to get in the US.

*derail over*

Sheryl Nantus said:

and you pay for prescriptions. And for eyeglasses.

and you might just wait a few months for a procedure it'd take a few weeks to get in the US.

*derail over*

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I live in the US, have health insurance...and I have to pay a partial for all of my prescriptions and eye exams/eyeglasses aren't covered, either.

I was able to get the surgery I needed in just a few weeks but I also had to pay well over a thousand dollars to cover what the insurance didn't.

To me, Canada's care doesn't sound so bad.

*sorry. now derail over*

I have pretty good insurance but have still been out $5000 in a given year. I really don't understand that....

Sheryl Nantus said:

and you pay for prescriptions. And for eyeglasses.

and you might just wait a few months for a procedure it'd take a few weeks to get in the US.

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Eyeglasses, yes - spent $500 last time, but the previous ones lasted me 7 years and would last longer if some woman didn't kick me in the face.

As for services, I'd say YMMV depending on what you're comparing, and where.

Certainly we're ages behind Sweden and such, but so is the rest of the world.

I live in Northern Ireland, and everything is free. When I lived in the south we had to pay for everything, which was scary expensive to be honest.

as others have pointed out, the cost of what you are giving up is a hidden cost. If you work for a big employer then they are able to provide health care etc, when you are suddenly responsible for that yourself it can add a huge amount that you weren't expecting to pay out.

So, in terms of the list of pros and cons, if this is something you want to look at as a career then it has to be taken into consideration, in all forms of publishing if that's going to be a single job.

Sheryl Nantus said:

and you pay for prescriptions. And for eyeglasses.

and you might just wait a few months for a procedure it'd take a few weeks to get in the US.

*derail over*

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I have great (comparatively, it's all a giant scam) insurance and I still had to pay a hefty piece of the total for my eyeglasses.

Try hearing aids, no one insures for hearing aids and they are expensive as hell and have to be replaced as the hearing deteriorates...

Another hidden cost in the U.S. is that because your employer isn't paying their part since you're the employer, you have to pay 13.3% additional Federal taxes, over and above income tax, for social security. Self-employment tax refers to social security and medicare taxes.

And you very likely will need to pay quarterly estimated taxes; this is a pain, because your income will fluctuate.

Medievalist said:

Another hidden cost in the U.S. is that because your employer isn't paying their part since you're the employer, you have to pay 13.3% additional Federal taxes, over and above income tax for social security. Self-employment tax refers to social security and medicare taxes.

And you very likely will need to pay quarterly estimated taxes; this is a pain, because your income will fluctuate.

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The tax is 13.3% this year because there was a decrease in the amount of Social Security that employees must pay in by 2%. Normally it is 15.3%.

And not to split hairs, but the actual increase in taxes if you are self-employed is 7.65% more, not 13.3% more. The way taxes work are the following:

Social Security Employee Portion: 6.2% (4.2% this year) (up to 106,800 in wages)
Social Security Employer Portion: 6.2% (up to 106,800 in wages)
Medicare Employee Portion: 1.45%
Medicare Employer Portion: 1.45%

So when you are self-employed, you pay both employee AND employer portions. If you are employed by a business, you only pay the employee portion. The employer covers the other amounts on your behalf. So yes, it is an increase in taxes but not the full amount.

Jill, tax professional in her dayjob.

Irysangel said:

So when you are self-employed, you pay both employee AND employer portions. If you are employed by a business, you only pay the employee portion. The employer covers the other amounts on your behalf. So yes, it is an increase in taxes but not the full amount.

Jill, tax professional in her dayjob.

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All of which is explained in the linked IRS pamphlet, which is why I linked to it.

jnfr said:

I was told recently that about 1000 fiction writers actually make their full living writing fiction, in the US. That sounds very low to me, but I have no idea how you would find out the truth.

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That has to be a total myth just based on the fact of the small number of authors I know personally who DO make a living writing fiction and ARE making a living wage.

rsullivan9597 said:

That has to be a total myth just based on the fact of the small number of authors I know personally who DO make a living writing fiction and ARE making a living wage.

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Yeah, I'm not sure if anyone actually has an accurate number on this. I've heard so many different figures. The majority of writers probably have day jobs, but I think there's still a substantial number making their living from their writing. More than 1,000, certainly.

rsullivan9597 said:

That has to be a total myth just based on the fact of the small number of authors I know personally who DO make a living writing fiction and ARE making a living wage.

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The Otter said:

Yeah, I'm not sure if anyone actually has an accurate number on this. I've heard so many different figures. The majority of writers probably have day jobs, but I think there's still a substantial number making their living from their writing. More than 1,000, certainly.

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Ultimately, it really depends on the circumstances of the writer and what "a living" is considered to be.