Tuesday, June 29, 2010

Wherein I Take The Fun Out Of Fantasizing

I’m a planner. I outline my books, I schedule my vacations, and I already know what I’m going to with my advance when (not if) I get an agent and sell my book.

Kristin Nelson’s blog really helped me out with this. She has three -make that four- posts that you should be reading on the topic.

First, and most recently, advances are hard to predict.
Second, you don't get it all at once.
You'll need to pay taxes on it at some point.

So here's my scenario. Let's say that I get an advance of 18K. Kristin Nelson threw out 25K, but I suspect those few six-figure deals skew the average, since she listed the usual range as lower. I'd be curious to see the median advance for each of those genres...

Back to the 18K. Say I get it in three parts. Now I'm down to chunks of 6K. Taxes will vary depending on your other income, and also on how big your advance is (Consult a professional!). But I think just for the purposes of idle daydreaming, witholding a third is a nice even chunk, and would end up being more than enough for me. So that takes me down to three chunks of 4K.

I think I'd set aside half of that to spend on writing related stuff - website, going to a conference, buying goodies to give away on the blog for promotion, a Nook...whatever.

This leaves me with 2K.

I'd like to tell you that I'd take my girls to Disneyland, or that I'd do something fun, but really, I'd pop that into the bank. It's nice to have an emergency slush fund because life happens. Car breaks, your kid goes to the ER, or maybe a family member picks a destination wedding and suddenly you have to spend a lot of cash or risk being branded as cheap and unsupportive :)

Because of all this, Kristin's fourth post makes a lot of sense. Don't quit your day job. Money matters - especially if you run out of it.



Anonymous said...

don't forget your agent's 15% taken off the top.

(check go to the agent first. they take their well-deserved cut and pass along the rest to you)

i think one of the first things i'd do is hire a good accountant. the last thing i want to have happen is to get bitten by the tax man later in the year.

Janine said...

I keep reminding my husband of these types of numbers. He gets stars in his eyes sometimes...

Mary Brebner said...

Uhg. Money. Why, oh why does it have be such a struggle? Boo.

So, we have to keep our eyes on the prize: keep on writing, keep on working & we WILL get there (love your positive attitude--gotta have that in this business!).

Hmath said...
This comment has been removed by the author.
Hmath said...

Gahhh....I totally meant to have that in there.

I'd originally had this post as a lot more numbers and a lot fewer words, but I changed, and must've deleted that line. You're completely right, fivecats!

Also, I'm a tax accountant in real life, so I couldn't agree more on consulting a professional. My numbers here were to show how easily that advance gets whittled away - and shouldn't be interpreted as advice.

Annie McElfresh said...

DUde so True!! But it's nice to dream. LOL

Kathleen said...

At least you guys are in the states. There are extra steps for Canadians.

J.S. Wood said...

Great post, Holen. Really puts it into perspective :)

Debra Driza said...

Hmmm...I could totally live with an extra $2k.... :D :D

Stina Lindenblatt said...

Thanks for the reality cheque (I mean check), Holen. Just shows you have to write because you want to, not because of the money.

And yes, definitely consult a tax account. There are a number of writer expenses that are considered tax deductible (depending where you live).