How much money would you need to earn in royalties in order for you to quit your day job? That would be your salary plus benefits. How much?
Back in the 90s, when Clinton was president and the Democrats controlled Congress, there was talk of redefining income as your salary plus benefits — for tax purposes. In other words, you’d be taxed on your income + benefits.
My employer gave us a printout of what our salary plus benefits would be for tax purposes. Mine would’ve double. About $100,000 back then.
As a self-employed writer, to quit the day job, you need to replicate your salary and your benefits package. So how much would that be? We’re talking your wages, vacation and sick leave pay, health insurance, and retirement. In addition, self-employment tax is roughly double social security and Medicare withholdings. You may also have to add in your employer’s portion of health insurance and retirement.
I bet we’re talking a lot of money for some of you.
If I was still working, the amount would be roughly $150,000.
If you are selling your ebooks for $3.99, and you get a 70% royalty, the amount you earn per book is about $2.70. Which means, in my case, I’d have to sell 55,556 ebooks each year in order for me to quit my day job — and make roughly the same salary plus benefits.
That is one heck of a lot of ebooks.
Now that number can be reduced to some degree with paperback sales, audiobook sales, and KU page reads. But I’d have to have a lot of paperback and audiobook sales and page reads to significantly alter that number of ebook sales. And that isn’t going to happen without a deep back list of titles.
So to quit your day job, depending on how much your salary plus benefits equal, it is conceivable that you’ll have to sell about 152 ebooks every day. Give or take.
However, we haven’t figured in the cost of production to produce those ebooks, paperbacks, and audiobooks. Which means that you will probably have to sell more than 152 ebooks every day.
Is it any wonder most writers don’t earn a living from selling books? They end up doing other things; such as, offering courses, or becoming ghost writers, or becoming editors. Writing their own books becomes a side thing they do so that they can still call themselves writers.
If we define writing success as making money, it seems to me we’re setting ourselves up for failure. Not that it can’t be done, because it is possible. And so is winning the lottery.
I’ve run across a number of good writers who were daunted by the magnitude of these numbers. They realized that they were not going to make money anytime soon. They realized that earning money from writing is a long game proposition. And when they made that discovery, they became discouraged and quit. Which is sad, because they were good writers and now we don’t get to read their books.
I’m lucky. I’m retired. I have an income and don’t have to work 8 to 5 to get it. For me, I’d simply like to cover the expenses that this writing gig incurs. Because otherwise, it is a doggone expensive hobby.
But if you have the dream of paying for your bread-and-butter peddling stories, go ahead and give it a try. But please do understand that you’re playing the long game. And plan accordingly.
How much money do you need to replace your day job? It’s more than just your paycheck.
Comments are always welcome. And until next time, happy reading (and writing)!
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