Your Money is Your Business or Keep a Lid on How Much Money You Make

I think it is a huge mistake to reveal how much money you make as an author. The details of your royalty advance on your latest deal should not be shared with other authors. It is similar to finding out the salary of the co-worker in the office cubicle next to yours. When I was a retail store manager we had major problems when salaries were discovered…I had to stop a near fist-fight between two people who had been friends.

Money Can be a Measure of Worth

Money is viewed by many as a measure of worth; i.e. a measure of the worthiness of your work. Consequently if you contract for a $5,000 advance with AlphaGammaDelta publisher and a month later, your best writing friend, who is at the same stage in her career as you are, contracts for a $8,000 advance with the same publisher for a similar project…what is your reaction? Sure, at first, it is excitement and joy for your friend. But later, in private, you will naturally begin to wonder about your publisher’s commitment to you. You think, “They must like Sally better than me!” Jealousy and bitterness can set in.

I’m not saying that this will happen to you, but I caution you with every ounce of my being, be very careful about ever revealing monetary details of a book contract with anyone. It can become a form of gossip that does no one any good. I know of an e-mail trail among authors that was very free with this kind of information and consequently there was tension towards a particular publisher for not paying everyone the same. This is unreasonable and unfair…and doesn’t help anyone.

Over the years I’ve seen a few thousand book contracts. Those deals have landed all over the board. The timing of a publisher’s economic situation and certain management directives can change quarterly (even weekly!). The relationship the author has with the publisher, the relationship the agent has with the publisher, the perception of value that the publisher has of a project… They all influence each situation uniquely.

But we tend to compare contracts as if all contracts are equal. Trust me, they are not.

Also be aware that some contracts have a non-disclosure clause in them for this very reason.

A Major Blunder in Etiquette

Years ago I was sharing the stage with a number of faculty at a writers conference for a panel Q&A. One author took the microphone and, without thinking, blurted out the amount of money they were paid on their last contract. There was an uncomfortable silence in the room since no one really knew how to react.

Afterwards an editor turned to me and said, “I never want to work with that author. There’s no filter nor is there any common sense.”

I Just Want to Help Others Know 

As far as sharing your successes as an Indie author? Again, be careful. You may want to help others succeed like you have. That is admirable. But at least limit your information to things other than your income.  Sharing what you spent on editorial, production, cover design, and marketing can be helpful for comparison. But declaring that you made a million dollars last month might not be the right message for your audience.

How Am I Supposed to Know What’s Normal?

One cannot analyze or compare their own income, contract, advances, or royalties with absolute accuracy. Recently I was asked, “What does the average author make in a year?” Instead of answering I asked in return, “What do you think?” They responded, “$45,000 per year?” I had to blink a few times and said, “That might be an average if you include a number of bestselling authors in the formula. But that also means there are a lot of others who would have to drop a zero from that number (down to $4,500) to create an average of $45,000.” I then told the story of a writer who had a day job unrelated to writing but wrote 10 published books by getting up at 5am every morning to write for two hours…and then helped the kids get ready for school and then went to work. For that writer, the books were a supplement to his income, not the primary source.

One author may get a one time deal for $15,000, but never write another book. Another author may write one book every two years, with each getting a $5,000 advance, but also publishes 30 paid articles a year. A third author may write a novel once every five years and nothing in-between, but their advance for their novel is $100,000. A fourth author may be prolific and publish eight novels a year, four with a traditional publisher and four as an Indie author…with an annual combined income of $60,000. Which one is normal?

You see the problem? There isn’t a straight answer to the question of what is normal when it comes to a writer’s income. Your agent is the best source of information. The agent knows what is typical in a situation and whether your deal is a good one or not.

Meanwhile, the Bottom Line is to keep your bottom line to yourself and be content with it being normal for you.

 

 

23 Responses to Your Money is Your Business or Keep a Lid on How Much Money You Make

  1. Shirlee Abbott March 5, 2018 at 3:43 am #

    Good advice, Steve, not only for book deals, but labor in general. As a Christian, I believe that God is working his best in my life–his best includes my income. God doesn’t measure my value in dollars, and he doesn’t compare us via some spreadsheet. He knows my heart and my weak spots. The Book of Wisdom gives us the guidelines (Proverbs 30:8-9):

    “Give me neither poverty nor riches,
    but give me only my daily bread.
    Otherwise, I may have too much and disown you
    and say, ‘Who is the Lord?’
    Or I may become poor and steal,
    and so dishonor the name of my God.”

    Give me too much, and I may say, “Look what I did!” and disown my God.

  2. Lillian March 5, 2018 at 5:20 am #

    This column is SO informative. I never considered that aspect of the business. Perhaps, it’s because my royalties have never been large enough to broadcast. Not yet.😀

    But when they are, I’ll certainly heed Steve’s advice.

  3. Carol Ashby March 5, 2018 at 8:31 am #

    Great advice, Steve. At the tech company where I worked for many years, researchers might talk about percentages but never dollar amounts of either base salaries or raises. We knew broad ranges of salary bands, but no one knew the exact salary of their colleagues.

    But one time a second-level manager commented that he’d just hit the social security maximum so his paycheck was bigger that month. We immediately calculated his salary. I thought he was worth the money, but for some of the others, the green-eyed monster got fed that day.

    It’s nice to hear numbers from you without names attached. That provides info and context without causing envy.

    • Steve Laube March 5, 2018 at 9:27 am #

      Carol,

      The numbers I used in the post are complete fiction. I made them up on the spot as representative of the variety of income sources and income timing. To compare one to another is like comparing an apple to a carrot and proclaim, “They came from the same grocery store. So they must be the same!”

  4. Carol Ashby March 5, 2018 at 8:43 am #

    Once your book has earned back its advance and starts earning per-book royalties, does it really matter whose advance is bigger? The lower advance just starts getting royalties on sales sooner, but the same sales should pay the same money.

    • Steve Laube March 5, 2018 at 9:34 am #

      Carol,

      You are correct. Once an advance has earned out the total income becomes the “number.”

      But our human frailty can use the initial investment (the advance paid by the publisher) as a measure of worth or value.

      Thus Author WOW gets a $2,500 advance and Author ZOT gets a $4,000 advance … both are debut novelists and are both with the same publisher. Author ZOT posts on Facebook with excitement that they got a $4,000 advance from WannBe Publishing.

      Author WOW sees that post and wonders why they only got $2,500 from WannBe. “It’s not fair! I’m a better writer than ZOT! My publisher must hate me! My agent is a failure! My career is over before it started! My publisher won’t promote my work as much as Author ZOT! I’m mad! I’m sad!” Etc.

      Author ZOT has no idea how crushing their detailed news was to Author WOW.

      • Carol Ashby March 5, 2018 at 10:38 am #

        So maybe it would be helpful for an agent to give his/her clients a tutortial on the relationship between advances and income after payout to put different numbers in perspective? Your engineers/scientists/ economists/accountants shouldn’t need it, but it should cheer up those for whom math is a four-letter word for more reasons than the number of letters.

        • Steve Laube March 5, 2018 at 11:53 am #

          A normal part of what we have always done.

      • Carol Ashby March 5, 2018 at 10:53 am #

        Isn’t it actually better for a debut or midlist author to get a smaller advance so they earn it back quicker? Wouldn’t that make a publisher more likely to want the next book if it brings in much more than the initial advance?

  5. Norma Brumbaugh March 5, 2018 at 9:00 am #

    I appreciate the advice and words of caution. I’ve noticed a fair amount of this by successful indie authors who are sharing/selling their secrets to others. Like you said, we can feel happy for them but sad for us. Disheartened may be the correct term. Then we get over it. It’s good to have this knowledge upfront. Thank you.

  6. Tisha Martin March 5, 2018 at 9:17 am #

    Steve … cute little piggy in the graphic (kudos to the designer who picked it out). Thank you for this informative post. I’m also sharing this blog post with my freelance editing communities because I think it is also important for editors to keep their bottom line on their prices as well. Love what you said about the general expenses to be given in order to help people find that “line” of value or “line” of what to expect. But I agree: Zipped Lip when it comes to your actual revenue. That’s something I thought was ingrained in us by our parents, along with don’t discuss religion or politics at work for the sake of discussion or potential argument. Your boss doesn’t pay you to talk about those things… I digress. Thanks, Steve.

    • Steve Laube March 5, 2018 at 9:41 am #

      Tisha,

      Thanks. I pick out all the graphics for each post on the blog, unless one of the other writers has found something specific for their day.

      You are correct that total revenue isn’t something to share. However, many freelance editors find that they need to post their prices on their web site to help prospective customers.

      However some freelancers prefer to keep their pricing list private and only share it with prospective customers who ask.

      Neither way is wrong. It is a personal preference.

      But if said freelancer announces, “I made $197,000 last year as a freelance editor!” it might not endear them to their colleagues. Instead the “green Pig monster” will rise from the emotional ashes.

      • Tisha Martin March 5, 2018 at 12:35 pm #

        Steve, I’ve found that posting my editing prices on my website very helpful to prospective clients because it allows them to also see the value they will be receiving for what it will cost them. Haha, if *any* freelancer blurted that they made that much money in a given year, the green Pig monster would definitely have yellowish orange eyes and no eyelashes.

  7. Sheri Dean Parmelee, Ph.D March 5, 2018 at 10:44 am #

    Thanks for the advice, Steve. I do not mention my income to anyone, since they would be in shock if they knew how much adjunct faculty members make. I will take your advice and keep any advances and royalties that I receive out of the public domain, as well.
    Have a blessed day!

  8. Claire O'Sullivan March 5, 2018 at 2:08 pm #

    Great post – I didn’t know this, but the only question I asked 1 author is privately, ‘do you make enough to pay your mortgage?’ Sounds like I am going the wrong direction… after all, loose lips sinks ships.

    Thank you for the information!

    Claire

    • Steve Laube March 5, 2018 at 4:40 pm #

      Claire,

      The problem with that question is no one knows what that person’s mortgage is.

      They may have done very well in real estate and their mortgage payments are only $500 a month, including property tax and insurance.

      Or they may have a home that carries a mortgage payment of $5,000 a month.

      Or they may have inherited their home and have no mortgage at all!

      Thus the answer to the question might be “yes” but you still don’t know what that means.

  9. Mark Stevenson March 5, 2018 at 7:09 pm #

    Steve,

    I am like others here that I see you and your agency as a whole package to learn the ropes.

    I understand that there are so many variables that it is virtually impossible to formulate earnings. But for a debut writer/author, it is almost terrifying to launch into a new career. It would also follow that, as believers, we should approach this as all endeavors, with a degree of faith in Almighty God that He will take care of our affairs.

    I appreciate your wisdom, along with your whole staff of agents. You have done more to educate me than any other.

    As always, I will save this article off.

    Gratefully,

    Mark

  10. LK Simonds March 6, 2018 at 6:56 am #

    Well, I’m just gonna blurt it out. I made $100 from writing in 2017 (short story contest win). Whoohoo! I’m not being sarcastic – I was as excited as all get out. Haha! I guess it’s all relative.

    I also learned a really helpful lesson during my non-writing career. We had some significant issues around inequitable compensation in my field about 20 years ago. I was upset about it for a long time. Then, one day the Lord really spoke to my heart about it from Matthew 20:1-16, and I was so ashamed.

    All that said, Publisher’s Marketplace gives a hint about deals posted there. A guy in my writers club got a “good deal” on a series of children’s books. He’d previously gotten a “very nice deal” for his first children’s book. I haven’t heard the guy mention any of it, but the deal he got was kind of motivating, especially after seeing him struggle along with the rest of us.

  11. Teresa Haugh March 7, 2018 at 4:33 pm #

    Years ago I worked for a large insurance company that was forced by the state to give equal pay to women for equal work. It wouldn’t have happened if those brave women hadn’t found out the salaries of their male counterparts. On the other hand, I worked for a large state university that published the salaries of every job/grade level in the library. I can remembering shedding a few tears when I found out the guy who washed and hung up the football uniforms made more money than I. Guess there are multiple sides to every story.

    • Steve Laube March 7, 2018 at 5:03 pm #

      Teresa,

      You’ve touched on the exact nerve which generated my advice in this post. Envy and disappointment about money.

      In the writing world it isn’t the same as a job in a corporation or a government institution where there can be issues about equal pay for equal work (but even that can be fraught with misunderstanding since one has to define “equal work” and “equal pay” and “equal seniority” every time).

      As in my example above with two author friends who find out that one received one advance and the other received a different one are placing their “worth” on what they perceive as an objective criteria. Jealousy and disappointment reign.

      And thus the need to keep your business to yourself (and with your agent).

Trackbacks/Pingbacks

  1. Top Picks Thursday! For Writers & Readers 03-08-2018 | The Author Chronicles - March 8, 2018

    […] Herbert describes the advantages of hybrid publishing, Steve Laube advises keeping a lid on how much money you make, and Daphne Gray-Grant tells us how to pitch stories editors will want to […]

  2. Writing Links 3/12/18 – Where Genres Collide - March 12, 2018

    […] https://stevelaube.com/money-is-your-business-or-keep-a-lid-on-how-much-money-you-make/ “I think it is a huge mistake to reveal how much money you make as an author. The details of your royalty advance on your latest deal should not be shared with other authors. It is similar to finding out the salary of the co-worker in the office cubicle next to yours. When I was a retail store manager we had major problems when salaries were discovered…I had to stop a near fist-fight between two people who had been friends.” I think this makes sense. Your finances should be private. I know I talk about my finances at times, but I don’t reveal specifics. […]

Leave a Reply

Your email address will not be published. Required fields are marked *

Get New Posts by Email

Get New Posts by Email

Each article is packed with helpful info and encouragement for writers. You can unsubscribe at any time with one click. 

You have Successfully Subscribed!