This post by Michael Hicks originally appeared on his site on 1/30/12.
In this second installment of my musings about moving from a full-time day job to writing for a living, let’s take a look at some of the financial issues you need to be aware of in the rapidly evolving industry of self-publishing…
Keep The Faith, But Don’t Count On Next Month’s Income
Between February and August 2011, I made a ton of money, around $105,000, from my book royalties. Not like the big authors, but more than the “modest car payment” amount I’d been making before from month to month. I had stars in my eyes and money burning a big hole in my pocket. We already had some hefty financial obligations (I’d been a well-paid federal employee, remember, and had the payments to go with it), and made some financial decisions based on “projections” that, in hindsight, maybe weren’t such a good idea.
Because in September, a month after I left NSA, sales took a nosedive after Amazon (which is where I get over 95% of my royalties) apparently changed some of its algorithms. The royalties for that month were about $7,000. Yes, that’s a lot of money to a lot of people, but in terms of our existing financial commitments, that was not good at all. Even if Amazon hadn’t changed anything, eventually your bestsellers are going to drop off the list. Otherwise, there wouldn’t be any books in the top 100 except King, Koontz, and Patterson, right?
Read the full post on Michael Hicks’ site.