From Kristine Kathryn Rusch:
Here’s a piece of advice you don’t hear very often:
Pay off your house.
Seriously, my writer friends. If you get a lump sum of money, pay off your house.
Or your car.
Definitely pay off your credit cards, and take them out of your wallet. Use them only when you travel to a conference or plan to make a big purchase.
If the indie writers who made a lot of money in 2012-2014 had followed that advice, they’d still be writing and publishing. Sure, their incomes would still be down, along with their sales, but their careers would continue.
How do I know they didn’t do that?
Because they’re gone. Mark Coker commented on it in his year-end blog. Writers in the comment section on this blog have mentioned that they’re leaving the business. The Kindle Boards discuss all the writers no one hears from any more.
And if you go to writer website after writer website, many of them for successful indies, you’ll see sites that haven’t been updated for a year or two, or you won’t find any site at all.
Well, those writers will say that their sales went down to unsustainable levels. Those writers will say there’s no point in continuing now that they can’t make the same kind of money they made in 2013. Those writers will say that writing, as a profession, is impossible.
And it is, if you don’t understand money management.
. . . .
I’ve never had a traditional job (for long) or a traditional attitude (ever).
And therein lies the heart of this blog post.
Because if I had had a traditional attitude toward money, you would not be reading this blog. You would never have heard about me. My career would be over now.
Money management is a crucial part of running your own business, and in the Survival stage, it’s all about cash flow.
Cash flow, for those of you who don’t know (and in the U.S., I’m assuming that’s two-thirds of you reading this blog) is about the way money flows into a business and flows out of it. In a business, cash doesn’t arrive at predictable intervals or in predictable amounts—such as $2,000 every two weeks. Sometimes a business is lucky enough to have a predictable payment cycle (for example, Amazon KDP pays at the end of each month), but not a predictable amount.
Even when a young business has a predictable amount of money headed their way—say, a client who agrees to pay $1,000 every month until a bill is paid off—that client might pay $1,000 one month, and then pay the entire amount the next.
The problem is that the business might have planned for the $1,000 per month, but not the entire payment. That entire payment (let’s call it $4,000) might seem like a windfall, but it isn’t. Instead, it’s money that was expected and should have been used in the succeeding months.
How many writers would parse out that “extra” $3,000 at intervals of $1,000 per month? Not many.
Link to the rest at Kristine Kathryn Rusch and thanks to Anthea and others for the tip.
Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.