Author Topic: New case study - is shifting towards being a pro novelist financially possible?  (Read 3008 times)

Nick_Miller

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I posted a case study summer of 2016 and then again this June, but now I have a specific question; namely "Can I transition to becoming a novelist starting in December 2019 while still being financially responsible and pursuing FIRE??"

Stats

Assets:
Home: $200,000
Retirement: $138,000
Cars (2): $17,500
Cash Reserve: $12,500
Misc Home Items, Checking Acct, etc.:  $5,000
Total Assets: $373,000

Liabilities:
Mortgage: $130,000
Student Loans: $58,000
Car: $8,000
Total Liabilities: $196,000

Net Worth: $177,000


Monthly Income: (all net)
$3800 (my attorney job, no benefits - I work for a small office)(extra withholding for state/fed to account for my writing income)
$2300 (her accounting job, she now puts 20% into 401k with a 3% match and also takes out her own health insurance before net)
$500 (my writing/novel income, the amount fluctuates month to month, but has been around $500/month for the past year)
$500 (her car reimbursement payment from her work)
$7100 total net income per month


Monthly Expenses:
Student Loans $1,000 (making double payments)
Maxing IRAs: $916 (this has already been done for the year)
Mortgage $880
Groceries $800
Health Insurance $750 (this is for me and the kiddos; my wife is insured through work)
1 Car $500
Daycare $350 (1 child, before and after school)
Medical/Braces $250 on average
Blow Money $240 (each of us gets $120 per month)
Eating out $160
Gas/Oil $150 (tops - our jobs are close and my wife's mileage is paid by work)
Utilities (electric/gas/water) $150
Cable/Internet $125
Auto Insurance $100 (2 vehicles, about $600 every six months)
Clothes $100 (mostly for the kids)
Gifts/Charity $100
Phone $75 (my wife's work pays for her phone)
Life Insurance $50
Total Monthly Expenses: $6,696

You can see that we have about $404 left most months, although it's a lot more these last three months of the year as we've already maxed out our 2017 IRAs.


So here is the crazy part; I LOVE writing fiction and I'd LOVE to do that as a career sooner rather than later (yeah so would a lot of other people, I know!) I know a part-time job will also be necessary, at least for the first few years post-transition. I need to figure out if even even a conservative plan is doable. Also, I need to talk more with my wife. She knows I love writing, and she's proud of my first book, but I am keeping all of this $ part inside my head for now.

My Plan:

I keep kicking ass at my attorney job through December 2019 (another 26 months from now)

In the first half of 2018, I release a second novel. This should spike my writing income. Right now, I've earned over $17,000 from my first novel. It's almost 2 years old. I need to see if Part 2 does as well.

If it does well, I start taking this plan MUCH more seriously.

By December 2019, the car payment will be GONE. The daycare will be GONE. The student loans should be down to around $38,000 if I keep the double payments going from now to then. I could always chop the payments down to "regular payments" from December 2019, moving forward.

Our investments, assuming decent returns, and putting around $20,000 per year into them, should be around $200,000 in December 2019.

Net Worth should be around $300,000 with only debts being $38,000 in student loans and a mortgage.

THEN in December 2019, I ask my boss to let me work part-time (20-25 hours), maybe for just $40,000 or so, and clear $2,000 net per month. I'd have to make up the difference of the $3800 net I make now, so $1800. I wouldn't be able to earn $1800 extra per month writing, BUT I might be able to earn $1000 per month writing, so a net loss of $1300 (because I already earn $500 writing now) as compared to my current situation. And I would sell it to him by stressing that I current make $90K. If I go PT for $40K, then that gives him $50K to hire a newbie attorney, so he'd have 1.5 attorneys for the price of old me.

How I would close the gap:  $1300 gap - no car payment ($500) - no daycare ($350) and making only regular student loan payments ($500) would do the trick, in theory.  And maybe a few years from then, I'm able to keep growing my writing income and jettison the part-time legal job. And really there are other places in the budget to chop too.

So what does everyone think?  If you were passionate about a field, would you push toward something like this? Is it reckless? Naive? And yes I have to talk to my wife, but first I need to get this all fixed in my head. I also need to wait until Part 2 comes out and see if it does well.

*I wanted to add that my plan still has us maxing IRAs each year. In theory, this investment could be reduced or eliminated if we were willing to just leave the stache alone from December 2019 forward. Using Rule of 72, the $200,000 should double twice, once at age 56, and another time at 66, so $800,000 in 2039 dollars plus Social Security.  However, I would much rather continue putting money into the IRAs to give us a lot more wiggle room in our future, at least for a few more years.*
« Last Edit: October 11, 2017, 12:16:59 PM by Nick_Miller »

MrThatsDifferent

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I think your passion is great. Your expenses are around $80k a year, you’d need 2mil to be FI. You’ve got $177k. You might want to think about getting more radical with cutting your expenses: cable, charity, groceries, blow money & eating out. Then, maybe increase your income by keeping your job and writing novels—mornings, evenings and weekends. Otherwise it seems like you’re skating by.

Dee18

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It doesn't look like you are there financially.  Not counting your home equity, you are at $107,000.  You might find encouragement with the stories of Scott Turow and James Grippando, two attorneys who continued to practice well into their writing careers.

As for the finances, it looks like you have a car that is not yet paid for (I realize your wife gets a car reimbursement), your grocery expenses are double what I would expect, and although daycare will be ending, there will be new expenses for your children.  Are you planning to help with college?  Also, I don't see in the budget money for something like replacing an HVAC or other unexpected expense.

Another option is to find a higher paying job, perhaps in federal government, where you could work a few years and then go half time.

Novik

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"Can I transition to becoming a novelist starting in December 2019 while still being financially responsible and pursuing FIRE??"

As much as I want to say yes, on the face of it the answer to this question is no. With your current situation, you're spending the vast majority of your paycheques. You might be able to mostly stop lawyer-ing and only write, but it would probably mean giving up FIRE (writing would be a "have-to" job, not a "want-to" job, and your wife likely would not have the option to retire early). It would be financially risky but not flat out irresponsible.

Also, I need to talk more with my wife. She knows I love writing, and she's proud of my first book, but I am keeping all of this $ part inside my head for now.

You need to start talking to her YESTERDAY so you're on the same page about long-term goals and timelines for retirement in general.


As for the purely financial side of things, you have a low net worth and spend most of your income every month. That's not the path to FIRE, unfortunately.

Net worth:
  • What's the car loan interest rate? Can you drop cash at it to pay it off sooner?
  • Student loans - what's the interest rate? Private or subsidized? Does refinancing make sense? Does paying only singly make sense to invest now?
  • 401k - with you two clearing at least 100k gross, while you're both working I think your wife should max out her 401k. Her takehome will drop but your joint takehome will benefit from reduced taxes. Aim for at least 400$/month increase to contributions (aka your current surplus, but it will cost less net).

I keep kicking ass at my attorney job through December 2019 (another 26 months from now)

THEN in December 2019, I ask my boss to let me work part-time (20-25 hours), maybe for just $40,000 or so, and clear $2,000 net per month. ... I might be able to earn $1000 per month writing, so a net loss of $1300 (because I already earn $500 writing now) as compared to my current situation.

How I would close the gap:  $1300 gap - no car payment ($500) - no daycare ($350) and making only regular student loan payments ($500) would do the trick, in theory.  And maybe a few years from then, I'm able to keep growing my writing income and jettison the part-time legal job. And really there are other places in the budget to chop too.

Your plan is solid and doable, but the most true thing you said is that "really there are other places in the budget to chop too."  I would also suggest that you plan to ask for the PT pay to at least match your current may on a % of hours worked basis. Why take 40k for 20-25 hours when you make 90k for fulltime now? (unless you work 45-55 hours now?)

Monthly Expenses:
Student Loans $1,000 (making double payments)
Maxing IRAs: $916 (this has already been done for the year) - can you plan for 2018 to spread this evenly so you can increase 401k evenly with your monthly surplus? (Or, since this is equal to 11k, why are they already full for the year?)
Mortgage $880
Groceries $800  - seems reasonable to me, but I know a lot of US based people would say it can be dropped at least 100$. Price match and eat less meat!
Health Insurance $750 (this is for me and the kiddos; my wife is insured through work)   Ouch! When the last time you compared this vs. adding kids to your wife's vs. other exchange plans?
1 Car $500  Why? Whose car?
Daycare $350 (1 child, before and after school) You don't say the ages of your kids, but could one babysit the other before/after school?
Medical/Braces $250 on average  Does your wife have one of those HSA/FSA things through work? Could you get one through your insurance?
Blow Money $240 (each of us gets $120 per month)  If you want to FIRE, this should drop, at least for you. It's 5k a year!
Eating out $160   See above, especially if this is tiredness driven takeout or lunches
Gas/Oil $150 (tops - our jobs are close and my wife's mileage is paid by work)  What cars are you driving?
Utilities (electric/gas/water) $150
Cable/Internet $125   Why? How does this breakdown? When's the last time you shopped around or called in?
Auto Insurance $100 (2 vehicles, about $600 every six months)
Clothes $100 (mostly for the kids)  Second hand or brand-new? Your local Buy Nothing group could also help.
Gifts/Charity $100  No argument if this was charity. Probably room to cut if it's mostly gifts.
Phone $75 (my wife's work pays for her phone)  Look, if you want to FIRE/switch to writing, you need to prove you can live under a lower budget now, not later. You phone is the easiest place to start!
Life Insurance $50
Total Monthly Expenses: $6,696  -  By my guesstimating the above, you could drop at least 500$ from this budget.

You have room for savings, but I don't see anything in the budget for travel, household supplies like TP (under groceries?), home maintenance, any home improvement wants, entertainment, or personal care (ie. haircuts if you don't do them at home). How accurate is the idea that you have a 400$ surplus each month?

Do you travel hack or take advantage of credit card bonuses? That could be free money for travel/cashback for savings etc. Bank account churning is pretty low-effort too. It may not make sense for you to sink a ton of time into this vs. writing, but maybe your wife would be interested if you sent her some links.

Lastly, what are you actually doing with your extra money every month? Do you have an investment account with ie. Vanguard? What are you invested in?


If what you really want is to write (and I think it is), please talk to your wife, cut the budget NOW, and throw everything you can into investments. I think switching to writing late 2019/early 2020  (I would consider the tax implications when you get closer) is doable without feeling financially stretched, but only under narrow circumstances, which you're only sort of heading for right now.
« Last Edit: October 12, 2017, 07:45:51 AM by Novik »
Over-thinking, over-planning and over-committing, aka my 2017 goals: Procrastinating my way to FIRE
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MrThatsDifferent

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It doesn't look like you are there financially.  Not counting your home equity, you are at $107,000.  You might find encouragement with the stories of Scott Turow and James Grippando, two attorneys who continued to practice well into their writing careers.

As for the finances, it looks like you have a car that is not yet paid for (I realize your wife gets a car reimbursement), your grocery expenses are double what I would expect, and although daycare will be ending, there will be new expenses for your children.  Are you planning to help with college?  Also, I don't see in the budget money for something like replacing an HVAC or other unexpected expense.

Another option is to find a higher paying job, perhaps in federal government, where you could work a few years and then go half time.

@fed job: and get a pension!

Canadian Ben

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$7100 total net income per month


Monthly Expenses:
Student Loans $1,000 (making double payments)
Maxing IRAs: $916 (this has already been done for the year)
Mortgage $880
Groceries $800
Health Insurance $750 (this is for me and the kiddos; my wife is insured through work)
1 Car $500
Daycare $350 (1 child, before and after school)
Medical/Braces $250 on average
Blow Money $240 (each of us gets $120 per month)
Eating out $160
Gas/Oil $150 (tops - our jobs are close and my wife's mileage is paid by work)
Utilities (electric/gas/water) $150
Cable/Internet $125
Auto Insurance $100 (2 vehicles, about $600 every six months)
Clothes $100 (mostly for the kids)
Gifts/Charity $100
Phone $75 (my wife's work pays for her phone)
Life Insurance $50
Total Monthly Expenses: $6,696

You can see that we have about $404 left most months, although it's a lot more these last three months of the year as we've already maxed out our 2017 IRAs.

First off for long term planning, I'd have a separate line items for your student loans, car and retirement savings, as these are expenses that will A) stop at some point (so you should take that into account as your plan advances) and B) retirement savings should be separate from expenses, since realistically, it's savings, rather than expenses.

Novik is 100% right, you are spending way more than someone who is looking to FIRE should be. There are so many places you can optimize, and every 100$ you can reduce, you can cut 25k from your FIRE number. You should be actively trying to do better, as it will be instantaneous increases in your savings. Groceries/Health Insurance/Blow&Eating out/Cable & Internet/Phone are all areas you can do better in. Look up IP DALEY COMMUNICATION PLAN, and make the changes: https://forum.mrmoneymustache.com/share-your-badassity/communications-tech-discussion-thread-1/.
75$ is way more than I am spending, and I'M in Canada!

If you spend the net year or so applying everything from MMM's site (read through the blog from the start, and apply each option/recommendation), you might be able to get close to FIRE in 2019, but fair warning, you need to make A LOT of changes from your starting point if you want to make it. (Also, I'd be pretty leery at exchanging a safe income to an unsafe one, while holding debt, and not having enough savings to at least bridge the short term gap.

Nick_Miller

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Thanks so much for the feedback, everyone! I have a very busy day today so I probably can't address each poster individually (which I prefer to do), but for now I can give this reply...

First of all, I think maybe someone miscalculated our blow money. It is $240 per month total, not for each of us. So our blow for the year is $2,880, not $5,000. And we generally fund movie nights or other entertainment out of our blow stashes. Still, I know it could be reduced if we wanted to tighten our belts.

Second, as someone pointed out, I included retirement savings, daycare, etc., as expenses, when in reality they would not be FIRE expenses so I don't think we need $2M to FIRE. But in all reality, I think we will take a graduated path towards FIRE, meaning grinding it out for a few more years, then shifting to PT work or lower stress work for a few years (this is where my plan fits in), and then seeing what the numbers look like.

Third, our interest rates on debts are VERY low. Car loan is at 1.9% and will be paid off in about 14 months.  Student loans are at 4.5%  I could always decide to revert to "regular" payments right now instead of the double payments, but it's been very satisfying to see those loans shrink faster.

Fourth, I am hopeful that writing income will SHOOT up with release of book 2. With book 1, I earned over $5,000 for the first month sales alone. The publisher is optimistic about a similar launch for book 2.

Fifth, I am eligible for monthly bonuses, sometimes big ones, that are not included in the budget I provided. Sometimes the bonuses are 0, but sometimes they are $3,000 or more. We used some bonus money this year to fund our IRAs more quickly, and now we are using bonus $ to pay for daughter's braces. We also used one bonus to fund a vacation this summer. Finally, we chose to help out a family member this year who got a divorce and was in dire financial straits.

Sixth, we are bumping up our net worth, on average, about $5000 per month between slashing debt and investing. I think that is very good progress, and it should get faster and faster as the stache grows. I think my projection for $200K in investments in Dec. 2019 is probably conservative.

I appreciate the hard dose of reality though! We need to continue to chop chop where we can. I guess another question now is, let's say I earn another $6,000 in bonuses from now through the end of the year (this is likely to happen)....what's the smartest plan for that $? Setting it aside for 2018 IRAs? Something else?
« Last Edit: October 12, 2017, 09:50:21 AM by Nick_Miller »

MrThatsDifferent

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Do the investment order thing and then, with what’s left, put into Vanguard and let it grow, grow, grow. Look, people are reacting because your expenses are remarkably high, especially compared to income. Maybe, you should only consider pulling the plug and switching a year or two after you can get your expenses down to something reasonable?  In the meantime, keep doing both. If you’ve been able to pull off writing books, while working f/t and being a parent, keep that going. Look at ways you can carve out more time, without sacrificing income. You need more, not less income for your lifestyle. If you had a MMM $25-30k lifestyle it’d be different, you’re not even close. You can keep this pace up. Don’t be distracted by what others are doing on the forum. Keep working, keep writing, ruthlessly reduce expenses and be a good dad/husband. You got this!

Canadian Ben

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Your loans are a large chunk, but even after all that, you'll be close to 400k NW (177 NW + 5k x 26), however since half of that isn't making income for you, you'll still need to decrease your expenses. It'll be time to re-evaluate when you've optimized your expenses, and gotten rid of the student debt. (The car is a non-issue at 1.6%)

stashing_it

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Although many posters have written about your finances, the other area that could use work is the income from writing.   Specifically I think that you need to be making more money, and have more books published before you would plan on transitioning.     One moderate hit is not enough of a track record to bank on.

My experience in this is publishing ~10 non fiction books on Kindle  (probably 150,000 - 180,000 words total) and making between $2,000 and $4000 per month doing so.    I'm doing this while having a full time engineering job, and 1 kid.    There are definitely people making more than me self-publishing fiction and non-fiction.

My recommendation is that while you're working on improving your finances, also make sure that you're putting out at least 100,000 works per year  (which is probably bare minimum to support a full time author).    I don't think that releasing 1 book every 2.5-3 years (estimate from what you said about your last book being 2 years old) will be enough.     I know that it would be easier to write without a full time job, but if you want to be doing all you could to break into writing, that means at least 1 book a year, preferably more.

I've you're already doing 150,000 words a year, and your books are just 300k+ words, consider making shorter books. 
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Meesh

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here's the investment order:

https://forum.mrmoneymustache.com/investor-alley/investment-order/

so basically, if you have an HSA max that, then max your wife's 401k if you aren't yet, check to see if she can put any after tax income into the 401k for a mega backdoor roth, and once those are all exhausted just stick the rest in something like vanguard or betterment.

I also have to agree your expenses are crazy high. I know it's difficult to cut but keep working on it. The best way to change long term is to slowly make better choices and reduce spending over time.

And get your wife in the loop!!

Astatine

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I'm not a writer and I'm not in the US. That said, I think it would be extremely risky to quit your job to try to earn f/t income as a writer. Could you take a 1 year sabbatical from your job to see how it goes?

Here are a couple of articles by Kameron Hurley on her writing income. She has published many books and has won a couple of Hugo awards (she's a scifi/fantasy author living in the US).

https://www.kameronhurley.com/made-writing-fiction-2016/
https://www.kameronhurley.com/what-i-get-paid-for-my-novels-or-why-im-not-quitting-my-day-job/

If it were me, I'd try to build writing income first and then quit the job. Her day job is writing (in the advertising sector) and she hussles hard on social media and with her blog, plus her Patreon, plus cons. It's not just sitting down in the evenings and writing her books and stories.

And really, you should be having this conversation with your wife and then sanity-checking the numbers with us. Lots and lots of conversations exploring options, what her POV is and so on (not just one 'hey honey, I've done the maths and I'm going to quite my job to be a writer!'). If you are married, it's important to keep your marriage strong and healthy with lots of open communication. If my DH had done all this thinking and consulted with a bunch of random people on the internet before he discussed it with me, I'd be pretty upset and hurt that I wasn't his first confidant for something as big and life changing as this would be. (ignore this if you've had the what-if conversations already, just not the actual hard $ amounts - it's a bit hard to tell from your post)
« Last Edit: October 14, 2017, 01:36:11 AM by Astatine »

Acastus

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My wife is a struggling writer, so I have some experience here. Writing income has similar distribution to acting. A handful of people that everyone has heard of make a huge amount of money. The rest wait tables and are trying to get their big break. There is a tier of writers who have solid following who earn a living, but most people don't know their name. Most writers do so on the side and have a day job. They cannot live on writing. Most people write because they need to write. Money is secondary.

If you have made the appropriate editor and agent contacts and can pump out 1, or better 2, novels per year, go for it.

Acastus

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You might model your new career on artist David Cherry. He, too, started as a lawyer but got tired of it. His sister is C.J. Cherryh, who has written over 50 novels over the last 30 years. She knew several artists who did her book covers. He traded legal services for art lessons and is now a good artist in his own right.

Nick_Miller

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Another quick general response, as today was crazy at work!

1) My wife does know I want to write eventually. She knows I love it. She doesn't know that I've been cranking numbers in my head (and on here). I figure every move I would take to explore a possible writing career in a few years (adding $ to investments, paying down debt, building a cash cushion) is an otherwise solid move anyway! It's not like I'm taking a wild deviation or anything. Building our net worth, especially in investments would be our main goal anyway.

2) I don't know if everyone can understand this but....the pride I have in getting out my first book is almost impossible to explain. When I consider that people paid their hard-earned money to read MY ideas that came into my head and that I was able to weave into a cohesive storyline....well, it's humbling. I'm like seriously??? They like my ideas this much? They want more? I have NEVER been as proud of myself in any other professional endeavor in my entire life. I FINALLY found something I might be really really good at. That's a powerful feeling.

3) And lastly, I'm not an idiot. :)   I promise that I'm not!  My plan is focused on: 1) my writing income growing, 2) Part 2 selling very strongly, 3) continuing to pump up the Net Worth, and 4) then and only then considering going to PT at my job or another job. And yes my wife will have to sign off on it. If any of these things don't happen, then the plan doesn't happen.




stashing_it

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The other point I'll bring up because I haven't seen anyone else mention it, is that it appears you are on the low side of the earning spectrum for an attorney.   I see your income as 3800/month net, with no benefits.  Which is ~45,000 / year, so I'm guessing 55K-60K gross

I'm not an attorney, but that seems like it's on the low side of the spectrum, and therefore there are higher paying jobs out there.   If you really want to bump the net worth, juicing your attorney money for the next couple years might be the fastest way to go.   That might mean you have to be more mercenary than you currently are, i.e. leave your current job for higher pay, even if you like the office, the work, the people etc

I could see you going from 60K to 100K (or more) gross just by making the right contacts, having a good interview and starting a new job.  That extra 40K over 2-4 years could really speed up your ability to jump ship.
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Nick_Miller

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@stashing_it,

Good point! I think the numbers I presented were a little misleading on the income side. I take out extra withholding (federal and stats) to account for my writing income. For 2016, my writing income was over $13,000, so the extra withholding served its purpose. This year, it won't because my writing income will dip. I just didn't bother tweaking the withholding again. But I need to start reporting quarterly on my writing now because it's obviously a business now after its second year. I'll go ahead and tweak my withholding down for my law job. That should free up about $500 per month.

Anyway, I just looked at my W2 and I earned $102,000 last year at my law job and paid about $23,000 in federal taxes (some of that went to cover my 2016 writing earnings).

This year, I'm on pace to make about the same, probably a little more. I earn a $80,000 straight salary and then I'm eligible for monthly bonuses, which can be $0 or much larger. If a big settlement check comes in this month, I'll be due a $9,000 bonus in November. That would be a rare occurrence. Bonuses are usually more in the $2,000 range.

For working a 40-hour week, it's fair pay. If I worked a more rigorous law job, I would have NO time for writing and my writing career would totally diiiiiieeeeee a horrible, tragic death, and there would be no "transition" to even consider. You have to strike while the iron is hot in this industry! I can't expect readers to wait four years for a sequel from a new writer. It's already been two years; I have to get Part 2 out in the next few months (it's close to being done).

« Last Edit: October 17, 2017, 07:16:28 AM by Nick_Miller »

stashing_it

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Based on your responses, it seems like you have a reasonable plan.  You've basically told us that you plan to keep working at your day job until you either become FI enough, or are making enough money at your side project to switch to that full time.   That's a completely legit plan, and is basically what I'm doing.   

Since you can't predict how well your writing will go, you won't be able to do more than work at it with your best effort and periodically re-evaluate
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Mariposa

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Hi, Nick. I'm a writer myself, so I know how important time is. I may also have a higher risk tolerance than some others here. You said in your journal in your ideal life, you would work M/W/F, and your wife would work T/Th. I don't see why you can't do that immediately, as long as you're willing to live below your means.

Say, between the two of you working part-time, you bring in a combined $60,000. Depending on how much you put into tax-advantaged accounts, you would be paying minimal taxes for a family of 4, between full child deductions / the EITC / and possibly even the Saver's Credit. Let's be conservative and say you net $50k, leaving $4166 a month for expenses. You would also qualify for Obamacare subsidies (pray that stays).

The following is still a fairly generous budget:


Monthly Expenses:
Student Loans $1,000 (making double payments) - $500. Why make double payments?
Maxing IRAs: $916 (this has already been done for the year) - $400 savings into retirement account that maximizes your tax deduction
Mortgage $880 - does this include property tax?
Groceries $800 - $600, including eating out / TP / soap
Health Insurance $750 (this is for me and the kiddos; my wife is insured through work) - $400, because you would qualify for a subsidy according to: https://www.kff.org/interactive/subsidy-calculator/ - pray subsidies stay under the current regime.
1 Car $500 - gone, after down-sizing to 1 car
Daycare $350 (1 child, before and after school) - gone
Medical/Braces $250 on average - why so high? are braces a temporary cost?
Blow Money $240 (each of us gets $120 per month) - $100
Eating out $160 - gone: combined with above
Gas/Oil $150 (tops - our jobs are close and my wife's mileage is paid by work) - $80 with one car
Utilities (electric/gas/water) $150
Cable/Internet $125 - $50 for internet only. I pay $15/mo for the slowest internet speed in my area and am perfectly happy with the service. Allowing for a higher budget depending on the options in your area.
Auto Insurance $100 (2 vehicles, about $600 every six months) - $50, one car
Clothes $100 (mostly for the kids) - $40 clothes AND shoes, bought second-hand
Gifts/Charity $100
Phone $75 (my wife's work pays for her phone) - $40, 2 cell phones on Ting - minimize data usage
Life Insurance $50 - $100 - x2 if no benefit from part-time work
Home maintenance $250 - realistically
Travel - credit card hacking - we fly 3x a year and have already redeemed $3000 so far in rewards

Total Monthly Expenses: $6,696 - around $4000

And the above is not even taking into account your writing income, which is already at a fantastic level!

YOLO and mustachianism aren't a contradiction in terms; mustachianism, because YOLO. Would you rather spend your life working a job you dislike so that you can consume more luxuries, or would you rather have time for writing and family? You can still life a fairly luxurious life and have it all.

The selling point for your wife is she gets to go part-time, too.

If you do the above, you should of course first make sure you can actually live close to a budget like that. Frugality is fairly natural for me, and I'm constantly amazed at how it's really, really hard for some people IRL. Also, I would have at least 6 months' expenses ($24k) in a bank/taxable account before you both quit your jobs.

You are in great shape compared to some writers I know.
« Last Edit: October 17, 2017, 09:54:38 PM by Mariposa »

Nick_Miller

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@stashing_it, yes I am trying to be as reasonable and analytical as possible while restraining my robust creative urges! Some days at the office I get mad because "This crap is eating up my day and preventing me from knocking out 5,000 words instead." That's the kind of mindset I'm in right now.

@Mariposa, wow thanks for all the suggested budget tweaks. Honestly, I think many of these (lower student loan payments, downsizing to one car, shaving $ from eating, lowering investment savings) will be things we end up doing in a few years. I think my wife and I would both be willing to make many, perhaps most, of those sacrifices to let us go both part-time. BUT I don't think we're ready yet, especially the reduced loan payments and reduced savings. I need to see debts drop and investments grow for at least another 2 years (or longer) to give us a stronger foundation before "coasting."  Now we definitely need to talk about the other tweaks now though....the biggest ones for me are food (we've gotten it down some, but school lunches alone are over $125/month) and daycare (we're strongly considering letting our youngest take the bus next year, which would eliminate daycare entirely during the school months).

Mariposa

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You're lucky to have such a strong creative urge, and to write books that others want to read. It's a gift. Every cut you make and can to stick to gives you more options in the near future. You must change your life.

Penelope Vandergast

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I guess I would ask: What do you mean by "pro novelist?" Alas, the vast majority of fiction writers, even the most talented and creative, make next to nothing (or just plain nothing) from their work, and will never be able to quite their day jobs. Same with most artists, musicians, and actors; the world is filled with really talented and accomplished professional creatives who will never make anything close to a living from their creative work no matter how good they are, simply because such work is not valued by the market (or the wider U.S. culture for the most part).

I know of one guy reviewed favorably in the New York Times with several novels out who will be at his day job until retirement, and he's basically famous in his subgenre. Literary novels typically make the author less than $20,000 even when published by a major press--probably more like $5000-$10,000. A typical advance by major publishers for first nonfiction books by unknown writers these days is less than $10,000. And you only get half up front. And a third of that has to go to taxes.

Genre fiction might do better, but even there I am guessing that most mystery, romance, and science fiction writers can't quit their day jobs either. Sure, there are a few famous people who make a lot of money, but these are the 1%. (It's probably more like .1%) The other 99% are lucky to make a few thousand a year. Even if they are really good at what they do.

You don't mention anything about agents, pitching your novels to agents, etc. Do you have one? What kind of publisher put out your first book? What is your relationship with your editor? (Making $5000 in the first month from your first book guarantees nothing. Plenty of people's second books don't do nearly as well as the first, and when that happens they often have a tough time finding a taker for #3.) If you are self-publishing then that's kind of a different story; I don't know much about that other than there seems to a huge amount of competition there too. On the other hand self-publishing is not the kiss of death it used to be as far as being taken seriously by "real" publishers/agents/editors. (It still has major stigma, don't get me wrong -- but I don't think it's as bad as it was.)

I don't mean to sound like a grump. But writing books does not guarantee in any way that you will make money from them. You need to assume that your income must come from elsewhere. It sounds like you are on that path anyway, so I guess my grumpiness is more to just depressingly remind you to stay on it no matter how good you are.

For a crash course in the business end of writing (as well as for some very good craft panels and presentations), I recommend the Muse and the Marketplace conference in Boston every spring, sponsored by the Boston writing org Grub Street. This is a huge conference attended by a wide variety of writers. There are also a lot of top agents and editors in attendance, as well as people who know about self-publishing. There are many opportunities to talk to agents/editors if you want (some cost extra money, some are part of conference) as well as get feedback on your work. If you want extended direct feedback--and the chance to start a real relationship with an agent/editor--you can buy a slot in the Manuscript Mart, where an agent or editor of your choice will sit with you for 20 minutes and give you detailed feedback on your manuscript (which they receive ahead of time).

At the Muse there is a decent balance, I think, between stuff for literary writers and stuff for more popular fiction/nonfiction writers, as well as craft presentations & workshops on stuff like structure, dialogue, how to write an agent query letter etc. that are good for any writer. It isn't cheap, but you can write it off as a business expense at least!

It is also a very sobering wakeup call about the sheer volume of competition out there -- some agents get 10,000 pitches a year and accept maybe two, or none; there are hundreds of ebooks uploaded to Amazon EVERY DAY, most of which are never read -- as well as the reality of how likely it is to make any money from writing. You can also get a rather bracing lesson in what agents are sick of seeing, what sort of style or phrasing is now a cliche even if you don't realize it, that most agents/editors never get past the first page of your manuscript before rejecting, etc.

ALL agents and editors are looking for something great, though, so maybe it will be you. So if you cannot live without writing then go for it. (I can personally relate to that.) But I would not quit your job permanently. Going PT instead is a good idea.

Nick_Miller

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@Penelope Vandergast,

Yes I'm aware of the stats; I've read a lot about the market. But I never mind another slap in the face because, in real life, friends/family are obviously hesitant to deliver the message with such candor. However, I've tried to make it clear that I am not merely projecting success and deciding to jump! That's not my plan!

I want to see how Part 2 does. I figure if Part 2 does as well as Part 1 (or hopefully, a little better!) than maybe "I am onto something." Again, if it tanks, there's no harm, no foul. I haven't jumped ship from my day job.

I don't mean to be overly vague about my story or my market, but I guess I am overly anxious about keeping my identity private. I will just say that no, I do not have an agent at this time. I might look for one in the future, but it's not necessary right now. I did not sign away my IP or anything like that; I read the contract and it was fair. And I have recently attended a writers conference and it was packed full of classes on topics ranging from improving your craft to the business/market end, and everything in between.

I'll be sure to revive this thread when I get my sales data for Part 2, but that's still months away.



harvestbook

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Good thoughts. I always considered fiction writing my "real life" and my jobs were just jobs and not careers--thus I turned down promotions and never sought to trade much more time for a little more money.

I started seriously writing 21 years ago. I published my first novel in mass market paperback in 2002. I published five more while working a day job. I had an agent, etc., but then my contract expired with declining sales and I had a few dead years where i was making just low hundreds on fiction while doing some freelance editing to stay in the game while working my day job as a newspaper reporter.

Of course the Kindle era changed all that. I self-published one of my backlist titles at the beginning of 2010 and then began publishing all my unsold titles I'd been writing without a publishing deal. By the end of the year, I was making more on the fiction than on my day job, with escalating sales each month. The kicker for me was when i realized that if this was a "real business," I could take that kind of growth to the bank and borrow money on it (not that I needed a loan.) I quit my job then and have been doing this ever since.

As pointed out, I'd be frightened by your debt. I think it's a lifestyle thing--I knew writers didn't make much money so I cultivated that mentality of frugality. It's easier to cut expenses than to grow extra money out of nothing. I took many of my profits of my first two years and paid off my mortgage, leaving me completely debt-free, so I had a cushion to take on risk. We also maxed our retirement accounts and HSA, started a 529, and generally saved like it could all go away at any time. I had a five-year plan, which is how long I imagined the digital boom would last. Well, now it's coming up on eight years and I think there are probably five good years left.

Keep in mind this is a historic window of opportunity--sure, some writers will still get big book deals from the major publishers, but their profits aren't exactly blowing the roof off (largely because indies are eating into their pie.) So in addition to taking advantage of this era, you also need to think about the other side-- what happens when it's not as easy as it is now, or when for whatever reason you have a gap in production? Since you've had some good sales success, you likely have a business/marketing foundation in place.

Author Tim Powers once told me, "I never had too good of a job because I knew it would become harder to quit to become a writer." There's some truth in that. Going from a six-figure lifestyle to a scraping-by lifestyle. But also many of my peers who broke in around the same time and kept on the traditional path have gotten big deals or movie deals. It's kind of a self-selecting crowd. It's as simple as: those who didn't quit are the ones who made it. Few of those had a straight line up, though--many had serious ups and downs.

So on the "living your life" level, I'd say you only get one turn on the wheel so you might as well go all out for the dream, without a safety net. But there's another saying I've heard: "It's fine to suffer for your art, but it's chickenshit to make your family suffer for your art."

I guess my advice would be continue cutting debt, banking as much as you can, putting out the second novel, and see where you are at that point. Good luck!
« Last Edit: November 04, 2017, 04:31:40 PM by harvestbook »

CrispySub

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So I could nominally make life suggestions as others have done and give my $0.02, but I have a different recommendation that may be up your alley.

https://k-lawyers.com/

It is a startup for lawyers to choose their work loads essentially like temp workers or M-turk for Amazon.  I have not used it, but I was considering investing in it a year or so ago. I chose not to for other reasons, but it seemed like a perfect solution for your case.

See how much you can make taking the cases you are partial to and write your novel around your workload. Instead of working part time, choose how much you need to work.  Have writers block? Take a case or two.  Book 2 or 3 is a huge success, take less cases.  This site could honestly be your bridge to the life you were describing.

Hope that helps.

fuzzy math

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You personally paid $23k in federal taxes last year? Do you file separately from your wife? The real thing that's killing you here is your lack of ability to contribute to tax deferred accounts. For reference my family of 5 pulls in $135k a year and pays $6k in federal taxes. I recognize you pay some self employment taxes and therefore yours will be higher, but still you're paying way too much. I max out my IRA, 401k and 457b. you'd have to go into some sort of public service to get the 457b but it would be a huge benefit to you. Or can you set yourself up as an independent company at your firm and create your own solo 401k? Or at least harass your small firm boss to come to their senses and open up a plan for you? If you did the leg work you could present numbers to the boss. For the amount you pay extra, there's no possible way you'd come out behind even if the 401k fees were high. Or set up your business for your writing and a solo 401k there and stash 100% of the money there.
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Nick_Miller

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Or set up your business for your writing and a solo 401k there and stash 100% of the money there.

Yes, this is my plan for 2018's income, to start a solo 401K. I need to work on it now because I know there is some paperwork.

Sapphire

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Found your journal and dropped by to see some good advice here....