Writers and Financial Woes: What’s Going On

An e-mail:

You talk about money and writing a lot, so let me ask you: What is it with writers and money? Lots of them seem to be in financial hot water these days.

Hmmmm. Well, let’s start by pointing out two rather salient points (note this discussion is primarily US-centric, but may have application elsewhere):

1. Things are tough all over. “These days” includes a profound recession, for which employment is a lagging factor, so let’s make sure we factor that not-trivial datum into our mindview. On top of this general employment malaise, writers of all sorts are taking an extra set of lumps: Journalism is losing thousands of full-time writers out of newspapers and magazines, writers in corporate settings are no safer than any other white-collar worker and publishing companies are actively trimming their author rosters and slicing advances. I’d hesitate to suggest that writers are having it worst of all recently, but you know what, they’re not just skating through this recession, either. They’ve got it middlin’ bad.

On top of this:

2. It’s not just writers who make lousy financial choices. There aren’t enough writers in the United States to cover all the bad mortgages out there right now, to make one obvious point. It’s not just writers who push the average consumer debt above $7,000 per card holder. It’s not just writers who save almost none of their income, leaving them vulnerable to sudden, unexpected changes in personal fortune. Writers are often bad with money, but then so are secretaries, and doctors, and teachers, and plumbers, and members of the military and any other group of people you might care to imagine, excepting possibly accountants, and honestly I wouldn’t even put it past them. So when we’re singling out writers for discussion, let’s remember they are not alone out there on the far end of the “wow, we really suck at finances” spectrum.

Having noted the above, here are some additional reasons why writers seem to so often fall face first, financially. Note that not all of these apply equally to every writer; we’re talking in vast generalities, here.

First, some practical issues:

3. Writer pay is generally low and generally inconsistent. And if one writes fiction for some/all of one’s writing output, especially so. I’ve written in detail about writing rates and payment before so it’s not necessary to go into detail again right at the moment. But what it means is that if one is a writer, one does a fair amount of work for not a whole lot of money, and then has to wait for that payment to arrive more or less at the pleasure of the person sending the check. Unfortunately, writers like pretty much everyone else have fixed expenses (mortgage/rent, bills etc), and those people generally do not wait to be paid at the pleasure of the writer; you pay your electric bill regularly or you don’t get electricity. This means writers are often in a situation where despite working prodigiously, they don’t have money in hand to pay regular, fixed monthly expenses.

4. Writers often lack what meager social net actually exists in corporate America. Writers are often self-employed, which means they bear the full brunt of the cost of health insurance or go without, and when they do pay for health insurance, they pay a lot because their individual plans don’t spread out risk like corporate plans do. Since per point three writers don’t get paid a lot (or regularly), very often they go without — as often do their spouses and children, if the spouse does not work for someone who provides health insurance. Which means they are quite susceptible to even incidental medical costs wreaking holy hell with their finances, and my own anecdotal experience with writers is that they are not exactly a hale and hearty group to start.

Self-employed writers don’t get 401(k)s and often don’t get around to funding IRAs, so their ability to save for retirement is made that much more challenging. They are on the hook for their full amount of Social Security taxes and also have to file taxes quarterly, and the IRS keeps a close eye on them (and all self-employed folks) for fraud and so on. Add it all up, and not being formally on the corporate teat makes it easier for writers to find themselves in a compromised financial situation.

5. Writers, like many people (even presumably educated folks), often have rudimentary financial skills. Which means even when they do have money and a desire to save it intelligently, they often don’t know how or have already gotten themselves into a compromised financial situation which makes smart and sane financial practices more difficult. Now, for writers, to some extent we can blame them and their arty-farty educations for this lack. I’m not sure how many MFA or undergrad writing programs out there require a “real world basic finance” class for a degree, but I’m guessing I can count them on one hand and have up to five fingers left over. Likewise, my anecdotal experience with writers suggests that not a whole lot of them have a vibrant love affair with mathematics, even the relatively basic sort that underpins day-to-day financial planning. So there are two strikes against them right there.

But to be fair to writers, once again, it’s not just them. I have a philosophy degree; it didn’t require a real world financial management class either. I don’t believe I actually ever took a class in basic financial planning and management, ever, and I’m guessing I’m not the only one there. This leaves basically everyone to get their financial educations from rah-rah financial bestsellers, fatuous talking heads on CNBC and folks like the sort who recently suckered millions of Americans into buying far more home than they could rationally afford on the basis that hey, the real estate market will never ever go down. This is, basically, an appalling state of affairs, and not just for writers.

Having enumerated some practical issues, here are some (for lack of a better term) “lifestyle” reasons why writers often have money problems:

6. Writers are often flaky. Which can mean (pick one or more) that they have short attentions spans, which penalize them for things like finances; they get bored quickly and therefore make bad economic decisions because they want to stop thinking about them and get on to interesting stuff; because they are clever with words they think that means that they are smart outside of their specific field (and particularly with money), which is common mistake people good in one intellectual area make; they trust people they should not with their money and/or their life situations; they go with their guts rather than with their brains; they prioritize immediate wants over long-term needs; and so on.

We could have a nice fun argument about whether flaky people become writers or whether being a writer makes one flaky, but it’s a discussion that’s not relevant at the moment; the point here is that many authors by their personal nature are not well-composed for the sober, staid and completely boring task of dealing with money.

(Note I’m not simply running down other writers here; ask my wife why it was when we met I had all my utilities on third notice, despite the fact I could afford to pay the bills. It will confirm my own “flaky like a pie crust” nature.)

Related to this:

7. Writers are often irrational risk-takers. Because how can you write about life without experiencing it, etc, which is a convenient rationale for doing stupid things and getting caught in bad situations, up to and including terrible relationships, addictions, impulsive life-changing decisions and so on, all of which end up having a (not in the least) surprising impact on one’s financial life. Hell, even a bog-standard nicotine addiction will set you back $9 per pack in NYC and $5 everywhere else (not counting the cost of one’s lung cancer treatments later). Whether these sorts of irrational risks actually do make one a better writer is of course deeply open to debate, but again, it’s a rationale as opposed to a reason.

Note that in the cases of 6 and 7 above, there’s another potential correlating issue, which is that writers like many creative types appear to have higher incidence of mental illness than your random sample of, say, grocery store managers or bus drivers. Mental illness — particularly illness that goes untreated/undertreated due to financial constraints — will have corresponding effects on one’s financial situation.

8. Writers are often attracted to other creative folks, including other writers. Nothing wrong with this in a general sense, mind you. We all love who we love, and what’s not to love about another witty, smart and talented person? The problem financially speaking, however, is that other writers very often have the same basic financial issues: low, irregular pay, no benefits, poor finance skills, tendencies toward flakiness and risk-taking, and such. Two incomes are theoretically better than one, but two sporadic incomes accompanied by everything else that comes attached to the writing life isn’t necessarily as much better than one would expect. And don’t forget: Kids may happen. They often do.

9. Writing can be expensive. The actual act of writing is not expensive, mind you — if one had to one could do it for free off a library computer, although few do — but everything around it adds up. Typewriters, paper, ribbons and correcting fluid have been replaced by computers, printers, printer ink and internet access, so the sunk cost there is roughly the same as it ever was, as are the costs of sending manuscripts and correspondence, at least to the markets which still require paper submissions. Writers who write in coffee shops and cafes pay “rent” in coffee and pastries; it sounds silly, but those things ain’t cheap when you check the tab. Writers are gregarious and go to things like workshops and conventions and writers’ nights at the local bar; these aren’t required costs but they are desirable activities and they cost money to attend (even if it’s just to get an overpriced beer).

Do all these things mean writers are more susceptible than other trades/professions to encounter serious financial issues? Not necessarily; folks in other creative fields (acting, music, art, dance) have the same set of practical and lifestyle challenges, and while the challenges of other lines of work will vary, they’re still there – hell, even doctors and lawyers find themselves saddled first with huge amounts of debt and then with some impressive overhead to keep their practices going. Pick a profession — there’s lots of ways to get yourself in financial hot water doing it.

However, there is one thing that can make it appear that writers as a class are in more financial trouble than other folks, regardless of whether or not it’s true:

10. Writers write about their situations. Because they’re writers, you see. Writing is what they do. And lots of writers feel the need to share their financial situations with an audience, to a greater or lesser degree. Why? Because (again, pick one or more) writing helps writers think through their situation; writing is therapy; writers feel an obligation to share; writers are hoping for sympathy, encouragement and possibly solutions or even help. Whatever their reasons, it shouldn’t be very surprising that you’ll more than occasionally read an author lay out his or her financial woes, and (yes) do it in an interesting and engaging style that sticks in your head more than, say, a similar blog post by a janitor might. It’s an interesting curse, you might say.

So those are some reasons writers might be having a hard time of it right now — and why it might seem they’re having a harder time than some others.

76 thoughts on “Writers and Financial Woes: What’s Going On

  1. Great post, Mr. Scalzi. I’m a full-time classical musician with a medium-sized orchestra contract, and I supplement my income through freelance gigging and private teaching. I DID take a business course while doing my Master’s at a certain well-known University, and I took an “Entrepreneurship in Music” course at a certain well-known Conservatory during my undergrad. Three points I would add: 1) when getting a degree in most any art, you live in a bubble. Ask around; everyone’s life plan involves graduating and getting their dream job in 2 years, and the prof’s don’t tell you otherwise because that’s how THEY did it back in the day. The reality is often shocking. 2) When the economy goes down the tank, cultural institutions/endeavors/education are hit the hardest first. I need both my hands to count the number of students I have lost to their parents job situation. Many of those folks who lost their jobs in the auto industry began pulling their kids out of music lessons several years ago when problems seemed to be looming. 3) Ask anyone who is struggling to make ends meet in a blue-collar/non-arts job how they feel about us. Many see us as lazy, doing something we love, which is obviously not WORK. Therefore, folks can ask such condescending questions as “what’s with [insert artist type here] and money.”

  2. Any time I see a fiction author make a reference to $—K amount of debt, often in reference to the IRS, I wince. After all, when I took on a contract job, I was quite shocked to find out the amount of taxes I owed. Nobody had bothered to explain to me the difference between a paycheck and an invoice, and I’m considered more financially savvy than many in my age group. (I’ve screwed up, naturally, but I knew at the time that I was screwing up rather than being blindsided by it.)

    Financial basics shouldn’t be a college course; it should be part of every education starting at the grade school level. But when it’s a given that colleges do remedial English, I’m not sure I would trust any financial classes to actually teach necessary skills.

    P.S. I live in California, which has proven over the last several decades that politicians have no grasp of finances either. And voter propositions drive me nuts. “That sounds great, but WE’RE BROKE.” And then it gets voted in anyway…

  3. F. Loree: I think that getting work in classical music is one of the hardest things a person can do. I wish you much luck in your endeavors.

  4. Something else: Writers are as prone as anyone else to trust people and institutions who, with 20/20 hindsight, they wouldn’t let feed their goldfish. Isn’t it bloody wonderful being wise after the fact?

  5. If anything, a philosophy degree gives you good bead on the nature of people in general. I have one too. You are also dead on about the personal finance angle as well. Arts and Humanities degree plans should require some sort of Economics or Finance classes. I think your talking about the financial side of the writing life does a great service to not only writers, but fans and casual observers, as well. Everbody should think about this subject to some degree without thinking it is beyond them.

  6. What really stinks is that the economy is so bad that those of us who want to make a break from the ordinary day job and try to make a living writing can’t. While the recession really hit established writers, I can’t help but think it hit up-and-comers even worse. Why take a chance on a new guy (or gal) when there is already someone whose quality is known who will work for the same pay?

    I hope it gets better eventually. I want to eventually make a living from writing that pays as well as my teaching, as unrealistic as that may sound.

  7. As a rather prolific writer who currently isn’t making *any* money off of my work right now, I’d have to say that yeah, all these points are quite true.

    One of those people I trusted with my money when I shouldn’t have was apparently my 18 year old self, so I started out way behind already.

  8. I’m not buying point #9, because those things are still cheaper than supplies for most other jobs (including most other self-employed jobs), but the rest seem right on from what I’ve seen. Also, for the reasons you list, a lot of writers including some of my favorites were already hurting or in precarious straits before the recession kicked in, and those are the people hit hardest.

    This is one of the things that offends me about the way the universe is run. It seems to me that if a writer is diligent and talented to the point that I have multiple books by them on my shelves, in a properly run world those people would be rolling.

    (I suspect this entry was sparked by the discussion of Donate buttons, over on Steve Brust’s site. If so, I’ll just say that I see those buttons as one way of redressing the above-mentioned bad world-building.)

  9. Dichroic, I would dearly love to live in a properly run world. If you or anyone else here manage to locate one, please let me know, because I’m convinced that our current world is broken.

  10. I’ve been a full-time freelance writer since I was 26 years old. And I was so ignorant about money that until I was in my mid-thirties, I thought a “mutual fund” was a life insurance policy. (I thought this because, as a child, I used to watch a wildlife program on TV sponsored by Mutual of Omaha life insurance, and the word “mutual” linked with money thereafter meant “life insurance policy” to me.)

    Even now (in my forties), I am more ignorant than knowledgeable about money. But I have read a number of financial books in the past 10 years in an effort to adjust the problem.

    In my experience, and also in my observation (I personally know several hundred professional writers), everything John says in this post is accurate.

    An additional reason, besides our scintillating way of expressing our money problems, that people may remember us bitching about money is that most people think “writer” and they think “John Grisham, Stephen King, Danielle Steele, Nora Roberts, JK Rowling.”

    But, actually, the vast majority of writers make somewhere between $0 and $2,000 per year. And career novelists–people who do this full-time and pay all their bilsl this way–typically make very modest money. A steadily contracted midlist writer with two books on the stands every single year may well be earning less than $30,000 per year–and is, let’s keep in mind, a SUCCESS STORY in terms of what the realistic expectations are for a professional writer.

    I went to an eye doctor a few years ago who was shocked that I live in a very modest 2-BR abode in Ohio (which abode I often struggle to pay for) rather than in a beachside mansion in southern California, which was how this educated man assumed ALL writers live. I once declined to contribute to some charitable fund or other, and the person collecting, who knew me slightly through mutual friends, got angry, saying that I was a WRITER, which meant I was WEALTHY, so why couldn’t I spare a few bucks? A mid-level executive I know socially was looking for a good home for his old computer, which he was giving away, and I said I’d be delighted to take it. He was STUNNED: “But you’re a WRITER. You must have TONS of money to spend on the latest state-of-the-art equipment! Why would you want this old thing?”

    I want that old thing precisely because I’m a WRITER–I have to economize wherever possible, whenever possible, and I struggle to make ends meet. (In fact, I recently went to a nice mall here to get something repaired. And I was SHOCKED at the retail prices I saw. Because I NEVER buy retail. I buy everything used, consignment, super-discount, charity-shop, eBay, and from my grandparents’ attic.) This is the writing life. Not the Jackie Collins Aspen-in-winter, Riviera-in-summer jet-setting lifestyle that a surprising number of people believe it is.

  11. Yup, I sniggered and I laughed, because you got all these points correctly and even though they seem obvious and logical, when you read them, they are hidden in plain sight and often not considered. I am mathematics worst enemy and would love to never ever deal with it, which is kind of strange since I am doing a bachelor in economics, but I didn’t say I am good at it sadly.

    I am just curious what other financial complications can arise for a foreign author, who has made a debut on the USA market, but lives in a different country. I am hopefully referring to myself in about ten years, in which time I hope I have gained enough awareness about how not to screw my financial situation.

  12. All good points. I’d add that viral business practices by those who sell our work that maximize their profit without care to our making any money at all don’t help. I wrote a lengthy blog about the Amazon Conundrum (http://kallmaker.blogspot.com/2009/10/amazon-conundrum.html) for fiction writers in smaller markets, and another about a bookseller (http://kallmaker.blogspot.com/2009/10/lacking-in-graciousness-and-generosity.html) who wanted my help pimping up his site but couldn’t have cared less whether I ever got paid for my labor. My lack of graciousness toward his business model was selfish, really taking advantage of my readers…

  13. This post and the previous comments may have depressed me.

    In retrospect, what with the somewhat present economic apocalypse, my let’s-read-some-dystopian-future-fiction lark probably wasn’t as well thought out as it should have been.

    Just wait till the female population annihilating plagues and the Soviets and the tragic isolated father-son duos come knocking.

    Ayup. It’s hard out there for a modern civilization.

  14. Yes. This.

    I’ve been a self-employed graphic designer for 20 years, and recognized myself and my situation again and again in your post.

    Last year, I undertook an aggressive campaign to get a handle on my finances and to pay down the horrific debt I’ve saddled myself with during all those times when the bills came regularly and the incoming receivables didn’t match up. When I lived as though every year were my best year, and all too often then some. I made good progress for the first 8-9 months, then the realities of 2009 hit.

    One of my clients, a $9 billion dollar business, declared bankruptcy shortly before they were obligated to pay me for a five-figure project I completed early in the year. Another large client, citing the recession, pulled one on-going project completely, and moved another one in-house. Commercial creditors raised minimum payments and interest rates. My 2008 debt-reduction progress quickly disappeared and the only consolation comes in recognizing how much worse things would be now if I hadn’t made the effort, if I weren’t still making the effort.

    Such are the risks of self-employment, and the realities of living beyond one’s income for far longer than would seem possible. Then again, without the easy credit, I wouldn’t have had health insurance for these past 20 years. I’ve always been willing to borrow to pay for that rather than live without it. Likewise other basic necessities such as electricity, heat, and quarterly tax payments. The extras…the travel, conventions, picking up theatre tickets or dinner for myself and friends, a fancy dress for the Hugos…those adjusted to the realities of the short-term income stream when I should have only been looking at the bigger, long-term picture.

    Self-employment has its benefits, too, and not every self-employed writer, designer, artist, consultant, shopkeeper, doctor, lawyer, etc. is in the same straights I am. I only wish none of us were.

  15. I’m thankful to be the rare and lucky kind of writer to have married a spouse who has a well-paying job, good health benefits, and fantastic money-management skills.

    It’s not a permission slip to slack off, but it’s a lot easier on the mind (and thus more conducive to the creative process) to know that bills and mortgage are covered even if Client #3 drags his feet with the sending of the check he’s been owing for the last three months.

  16. Points 1, 2, & 5 are probably the most important here and are why the 30-year-old-Joe wouldn’t have thought that the average writer has it any better or worse off than the average person…because, well, writers are people like you or I and as such, why should their financial situations be any different?

    I didn’t learn money skills until until maybe four years ago and that was after my not-yet-ex-wife and I had amassed some serious debt. I have a corporate job and make okay money (though less than i did six months ago), but things are tough all over and without a safe environment to learn about money, some lessons are only learned the hard way.

    (I wish my parents taught me about money growing up, but unless they started when I was really, really young, would I have listened? Probably not.)

    Add other unplannable things like divorce or losing one’s job or reductions in pay to a shaky foundation and you’ve got a difficult situation.

    But writers write about it publicly and many of the rest of us do not.

  17. Most writers I know who’re in dire financial straits either had a second job, got laid off from that, or have a spouse/partner who had a full time job and got laid off from that.

    All of them experienced a huge drop in income, and none of the writers were eligible for unemployment, which has saved a lot of middle class types like myself from total ruin.

  18. Book stores are dropping like leaves and good paper isn’t getting any cheaper. My one hope is that maybe the big boxes can start using Print On Demand machines so that they don’t have to tie up millions with inventory. Dealing with unpacking, stocking, re-packing and sending back books eats up a lot of time and money.

    If we lived in a post scarcity society, I wonder how many people would write books even if they never got paid?

  19. I think part of the reason you are hearing about it is that the credit many people either a) wisely used for a bit of “smoothing” or b) less wisely used to maintain the lifestyle that their career would have sustained a few years back, has vanished. A friend just lost a small business that had been around for over 30 years – the credit lines he’d used to run the shop for years got pulled. Of course, he didn’t admit what was going on to anyone until it was too late.

    Another thing is that many artists/writers I know had little side day jobs, often with former employers, that never got mentioned in their blog or interviews. Those have disappeared as well.

    And spouses whose jobs are less secure than they were are probably putting a bit more pressure on too. In our household, I’m the writer AND the secure job and I’m getting fairly frazzled.

    One note, someone who writes about these issues is Hillary Rettig. She has a book for activists, does a fantastic workshop called “How to Write a Lot,” taught at Grub Street in Boston and various locations when she travels. She is working on a book for artists and writers. Her message is to recognize all the ways the deck is stacked against you if you want to be an artist/activist and to practice extreme self-care (which includes controlling finances) to protect your art and your sanity. She has lots of downloads on her website, The Lifelong Activist, including a great one on job-hunting in a tough market. I took the Write a Lot workshop, there was an award-winning novelist and someone with a New York Times notable book in it and me, who has yet to submit, and everyone got a lot out of it.

    One thing to add – I do think cons should add a financial workshop for writers and artists – not just one to scare the newbies, but one to tell people they are not alone and how to deal with the reality of their situation.

  20. Dude, nailed it. I just wrote a post about my ‘system’ b/c a bunch of writers have been asking me over the last year (more frequently than before) how I arrange all that stuff, which reminded me that a lot of people don’t have a system…

  21. Well, I know lots of people who aren’t writers who are broke, so I’m not sure that writers are different than people who do other types of work. (as you pointed out.)

    Writing is notorious for not paying well. I started out by publishing some short stories in science fiction magazines. But after reading some books about writing and checking out what other writers were doing, I found out that science writers are among the highest paid writers, and I knew I could do that, so I set about it.

    To be fair, the managing your finances books and television personalities pretty much give out really basic, sound, common sense advice. I never heard or read “expert advice” that recommended people should take out a larger mortgage than they could afford. In fact, if everyone followed the standard rule in the finance books of keeping your mortgage payment at 36% or less of your gross income, then we would never have had a housing bubble or meltdown to begin with, and people in foreclosure would be there because they lost their income, not because their mortgage adjusted out of their affordable range.

  22. What? Authors don’t sit around, typing while scantily clad women feed them grapes while being fanned by palm fronds?

    Damn!

  23. I don’t believe I actually ever took a class in basic financial planning and management, ever, and I’m guessing I’m not the only one there.

    You’ve hit it right on the head there. Heck, I spent ten years in engineering school, taking several courses in economics, and I had exactly one hour of lecture on financial planning and management in that time: a retiring electrical engineering professor my senior year realized how little we knew about the subject, and spent a class period showing us how to put together a retirement plan. Useful, that, and very few of us paid attention. *sigh*

    I’m curious: do professional writers’ organizations like SFWA provide any resources in this regard? Do they provide access to financial planners at discounted rates or articles on the subject? Maybe group rates on things like health insurance?

  24. I agree with everything here. The only comment I would add, and perhaps it falls under the “writers are flaky” section, is that writers–hell, EVERYBODY–who are good with money and personal finances may not be good with money and personal finances ALL THE TIME. My wife and I are, generally, pretty good. But there’s nothing like an economic meltdown and a handful of poorly timed expenses to put a LOT of pressure on your personal finances. We’ve weathered it okay, but if we’d just been a teeny bit more conservative and a teeny bit more concerned that a storm was comin’ and that even though we were prepared we were still gonna get wet, I think we would have been happier when clients did their slow-pay thing and business slowed down the same time we replaced a roof and had a bunch of car repairs and miscellaneous kid/family expenses.

  25. When I was a used book buyer, a rather well known science fiction author ended up selling us books he owned or had scouted around town to help pay for his medical bills. I walked to the section and saw his name on at least a dozen novels and there he was towards the end of life still hustling to pay the bills. It was very sad.

  26. Re Laura @ #10: I have encountered this writer=rich meme even among people who know writers and should know better. Some folks who work on cons (usually the newer ones) think that writers have unlimited money and time and can not understand why someone would skip attending a con at their own expense. Of course, the writers do feed this concept a bit because few folks really want to tell the world they are barely getting by. I don’t blame them for this. They do have an image of being smart and confessing that they don’t make much does erode this.

    I keep getting told that I should be a writer by folks who do vocational guide work. They all cite the high pay/easy hours aspect and get quite offended when I point out that there are only a few Kings or Rowlings.

    BTW, Laura, you had the luck of having your parents as an example of how to handle money. Most writers did not have that guide.

  27. You know, I was going to object to the “writers are flakes” part, but as we speak I am flaking out of two social engagements, so instead I plead the fifth.

  28. One would think that someone disorganized, easily distracted or bad at hitting deadlines would find a more congenial profession than accounting, but flaky accountants do exist. Because most employers screen people handling money, someone whose flaky habits have led to financial problems would have trouble finding a new job in the accounting profession. Once the job is in hand, flakiness with money generally won’t lead to dismissal unless one starts to be flaky with the employers money. That’s bad, m’kay? People start using ugly words like “embezzlement” and “fraud” and “district attorney”.

    Even so, with several accounting degrees and a professional license, I must say that the only formal training I’ve ever had in handling personal finances was through my employer when pensions phased out and 401(k) programs phased in. The oilfield service company I worked for in those days offered a comprehensive training on financial basics to encourage its employees to save for retirement.

    Of course, if one thinks that financial matters are interesting one tends to read widely on the subject.

    -Crystal, an accountant

  29. On coffee shop rent: Too, too true. When I was making a comfortable 9-to-5 wage and writing short stories for pennies a word and struggling to finish my as-yet unsold novel, it made sense to blow two or three or four bucks a day at the coffee joint and write for an hour or two before heading over to my cubicle and working for The Man. I mean, I wasn’t writing for real money anyway.

    But once I got my first novel advance check? It wasn’t a lot of money, but it was real money, and now I needed to measure my coffee joint habit as a business expense. I still pay too much coffee shop rent (about ten bucks a week) but now I spend more time writing (and drinking coffee) at home.

  30. To Laura at #10. I actually think there’s a weird, simultaneous dichotomy out there as far as writers are concerned. In my experience the general public SIMULTANEOUSLY believes that novelists/writers are wealthy and poor. They think we’re all JK Rowling (and really, yeah, she’s worth a billion dollars, but how much of that comes from the books and how much from the movies and merchandising?) or you’re the starving artist type living in a garret somewhere.

    What’s so weird is I know a fair number of freelance writers and novelists and most of them are pretty solidly middle class doing okay.

  31. My writer husband was laid off from his writer job yesterday (one day shy of his first anniversary), so I’m getting a kick out of the timeliness of your post.

    My husband is absolutely terrible with money, and although I’m better than the average American, it’s extremely hard to make longterm financial plans when your spouse’s income is variable, unreliable, or even non-existent.

    Between my husband’s severance package (he actually got some this time, so we’ve got that going for us which is nice) and unemployment after that, we’ll be okay. Our plan is for him to find a job, ANY job, and we’ll be able to stay in our townhouse and pay our bills. Oh, we won’t be going to Hawaii any time soon (which we’d been planning to do in April), but we’ll at least be in the black.

    So we’ve got that going for us, which is nicer than what many Americans are experiencing right now. Hopefully that silver lining won’t tarnish on us.

  32. Whenever I see something like this, I am reminded of the very sad story of George Alec Effinger, a very talented (if a bit obscure) writer who not only died drowning in medical debt, but lost the rights to some of his fictional characters due to a crazy quirk in the bankruptcy rules.

    Right now, though, things are tough all over. Believe me, writers are not the only ones with no financial background or safety net. I am an attorney, and you would think that lawyers would be super careful and knowledgable about financial issues. Nothing could be further from the truth; almost all of us have crippling law school debt (usually over $100K, at a minimum) and, while we make more than most writers, it’s not as much as you think, especially if you avoid the jobs that involve evil (any sort of personal injury law (either side), for example).

    I guess what I’m saying is that financial education is a need for almost everyone. It shouldn’t be taught in college–it should be taught in high school. There are plenty of blue-collar workers, and doctors and lawyers, who are every bit as flaky as the flakiest writer, and suffering as much. As the Proprietor of this here website points out, you hear about it more from writers because, well, writing is what they do. The problem is much broader than just this group, however. Of course, the irony is that if we had more education on finances earlier, people might have avoided those bogus mortgages and we would all be better off….

  33. Marko @15: Dude, I’ll see your three months and raise you another SEVEN.

    I’ve been a freelance writer/editor in the educational publishing field for the past couple of years (I was an in-house editor for a few years before that, at a company that went under a year ago). The ed-pub field is *lousy*. States don’t have any money, so they’re not ordering books, so the big pub companies (your Glencoes and Prentice Halls, etc.) are keeping what little work there is in-house and aren’t hiring many freelancers, and especially aren’t hiring the smaller ed-pub materials developers to develop new products, so those companies are laying off people or closing altogether (and divisions of the big companies are also closing or moving). Those who’ve been laid off are now trying to go freelance, creating more competition for those of us who were already freelance, and all of us are in a panic, scrambling for whatever crumbs are out there.

    Add that to the lost lines of credit, and an invoice that was supposed to be paid in 30 or 45 days is now TEN months overdue. And going after the money through the courts isn’t a great idea because that’s time-consuming, probably useless, and you’ve now burned a bridge and your name is taken off of the list of good freelancers at that company–and they might have work again *someday*–AND people in the industry talk. We’re all living under the (possibly flakey) hope that the pendulum has to swing back and projects will get rolling again. Right now we’re all holding our breath for “the first of the year.” I’m just afraid that once January rolls around, it’ll be “this summer” and then “late fall,” etc.

    I’m starting to imagine myself myself in a Target vest this winter.

  34. I notice lots of authors have another job besides writing. The ones that seem to have a lot of trouble making ends meet don’t have another job. If they can’t make ends meet, they should whore themselves and get a job with benefits and a decent salary, like I did.

    I think my responsibility as a reader is to buy new the books of authors I love. I am not responsible for supporting their poor financial decisions, their travel to cons, their coffee shop jaunts, restaurant meals, cell phone expenses, cable TV, and honeymoons. Those expenses are not necessary for living. It really irks me when I see “poor” authors live “better” than I do and then see them whine about their financial condition.

    I feel the same way about “poor” artists and musicians.

  35. Great post. Being a writer for me would be one of those “dream jobs”. The ability to create worlds and characters, fleshing out a story etc. just sounds way cool. I realize of course it is hard work and not necessarily always rewarding, just like any other job. It has its’ ups and downs (as you pointed out) and at the end of the day a good writer can be as successful as any of us regular folk I guess. But, it still is a “dream job”. If only I had the talent, skill, ideas and guts (something writers must have?) to actually do it!

  36. Who was it that said “At any one time there are only 10 people who can make a decent living writing Science fiction, and 4 of them are named Robert Silverberg”?

    Why is it that people think that writers are well off, but fully understand that musicians are poor and sleep on other peoples couches? From a financial standpoint, the two are fairly equivelent.

  37. Writing is both a lonely profession and something which needs to be fed. Locking yourself solely into the metaphorical garret to write can drive you crazy. Hence, despite Our Host’s book title to the contrary, the number of people who do write in coffee shops, at least part of the time.

    Increasingly, though, there are costs to doing business in writing beyond the paper and printer cartridges. Since most writers are expected to do some of their own publicity, the going to cons, working the Internet, meals, readings, signings, adds to the bill — yes it is optional, but it can also help build recognition and a following. Readers have come to expect that their favorite authors may come to a con they are attending. To say nothing of meeting contacts and getting ideas from other people. The which-came-first chicken/egg dichotomy can get very confusing in the real world, and may not be worth wasting time to figure out.

    Yes — most of the writers I know work full-time at a “day job” and fit in the writing when they can. But even full-time writers can’t write 24/7/365.

    And the lack of financial advice isn’t restricted to any one field. While I was in Physics graduate school the stock market tanked one day — and being in the middle of a program there wasn’t a damned thing I could do about it. But there were also no classes or even seminars in how to manage money, or even how to write a research grant proposal and how to manage a research budget. And finishing in 1989 I graduated into a jobs market rich in unemployed and underemployed PhDs. I applied to 300 positions the first year. It’s one thing to lose out at 1-in-300 odds for a position. It’s another when 1100 Physics PhDs apply for one entry level position, which then is canceled due to budget cuts. 0-in-1100 odds suck.

    And Emily — sometimes there are no jobs you can get so all you can do is soldier on. And that’s not going to happen in a sterile writer’s cell.

    Dr. Phil

  38. John Murphy @ 24:

    I belong to (and am immediate past-president of) Novelists, Inc. (Ninc), an organization of professional novelists (which just celebrated its 20th anniversary). One of the things we do it a regular column in our monthly journal, NINK, called “Writing is Taxing,” written by a CPA and talking about every tax issue under the sun for freelance writers, including things like retirement accounts, deductibles, amortizing, etc. We also have occasional feature articles in NINK about money-and-writers. (We additionally offer several scholarships each year, on a first-come first-serve basis for members who can’t afford it to attend the annnual Ninc conference, which has a networking and self-education focus rather than being a promoting-to-fans venue.)

    Ninc is at: http://ninc.com/

  39. #33: As I understand it, George Alec Effinger did NOT lose his copyrights and use of his characters when the creditor looking to take them failed to show up for a judicial hearing.

    Best,

    Bill
    SubPress

  40. A side-note I’d like to add to #3 isn’t just that writer pay is low and inconsistent. It’s that so many publishers pay if and when they damn well feel like it that writers find themselves in serious financial straits when they make the mistake of believing said publishers. I ended up in several large financial holes in the Nineties because of this, where I was dependent upon writing revenue to cover bills, and I had publishers swearing up and down that the checks were on the way right then. Back when I was wasting time at Sovereign Media with “SCI FI” and “Sci-Fi Universe”, I had the assistant publisher telling me personally that several rather large checks were already out, and then lying to me again and again when they didn’t arrive. With one, it arrived a full six months after the contract date, which made me ask “So why the hell do your contracts state that payment will be submitted within 60 days when you have no intention of following through?”

    (Earlier this year, I was ridiculously glad that I’d learned my lesson on this when I was asked by a good and dear friend to contribute a review to “Science Fiction Weekly”. Payment was to be remitted within 60 days, and I only got my check five months after acceptance. Even then, I only got paid because I threatened to out the personal phone numbers and E-mail addresses for all of the senior executives at the Skiffy Channel, and this was when the whole “SyFy” fiasco was starting. Oh, Craig Engler cried about how he had absolutely no idea how this happened and that Skiffy always pays its contributors, but I find it interesting that he ignored repeated requests and queries until I threatened to inconvenience his bosses. If I’d actually needed the money, I really would have been screwed.)

    The other thing to remember is that the old advice on getting satisfaction in these situations doesn’t work, either. Most of these sleazebag publishers love the threats of legal action: I once worked for a Dallas-based business magazine that was so delinquent on payment that the entire staff hit the publisher with a class action suit. The dogfelcher simply refused to show up to court, and as all of his money was tied up in a trust, he simply shut everything down, gave it to his frat brothers, and dared his former employees to do something. Following the lead of Harlan Ellison doesn’t work, either, because many of these dolts will simply countersue or threaten to do so, and a writer who’s already screwed won’t have the money to start a court case. (These days, just TRY to mail some of them a dead gopher, unless you like DHS hanging around your house.)

    Now, I could also add that these delinquencies cost even more when you figure that rent and electricity bills are behind and the suppliers of both are perfectly willing to let bygones be bygones if you’re willing to pay late and reconnection fees. With the business magazine I mentioned, I had my phone turned off multiple times in 1995 due to nonpayment because I was waiting for checks. As always, it’s interesting to see that the publisher and his staff never have to wait that long to get their checks: for a very short time, I was the content editor for Sovereign Media’s now-defunct SciFiNow.com, and while my checks for contributions to the print magazine always arrived around the 30th of February, I consistently got my editor paychecks right on time. I never got a straight answer as to why they couldn’t have given me both in the same envelope, seeing as how it was the same flunky in payroll who handled both sides.

    And the last problem? We can bitch and scream about the horror of nonpaying publishers, but the reality is that too many established and wannabe writers will continue to let these bums get away with it, for fear of being labeled “difficult”. “Oh, gosh, if I sue or just go to the publisher’s house and beat the fuck out of him, then I’ll never have the opportunity for him to fart in my face in the future.” Not only is there that fear that the sleazebags will all work together and compare notes, but there’s the attitude that THIS time things will be different. Far too many writers put up with this abuse like beaten housewives, assuming that they’re beloved because they’re still being published. For some inexplicable reason, this seems to be especially bad with nonpaying venues.

    (Also back in the Nineties, I regretfully contributed to “Science Fiction Eye”, which was already getting its reputation as “The Last Dangerous Magazine” due to its entertaining publication schedule and the increasingly bizarre lies told by the publisher/editor as to why 2 years or more passed between issues. I finally got tired of the routine and quit, and the editor sent me a self-important response, telling me that he was going to contact all his friends in publishing and let them know that I was being completely unreasonable for bailing on a nonpaying magazine that built its business plan on repeated viewings of “The Producers”. Oh, I was going to pay for my sins unless I came right back and apologized. I have the same response now as in 1996: “Puh-LEEEEEEZE, Brer Fox, don’t throw me in that briar patch!”)

  41. Mark @ 27:
    “BTW, Laura, you had the luck of having your parents as an example of how to handle money. Most writers did not have that guide.”

    Er, Mark, keep in mind what John has just written about writers and money. And how accurate it is. And then consider: I was raised by a writer.

    So of COURSE I reached my mid-thirties without even knowing what a “mutual fund” was.

    On the plus side, I was raised to that it’s normal for money to come in unsteadily and unreliably, and I never saw anyone in my family fight about money. Sometimes you’ve got it, sometimes you don’t, and you make adjustments accordingly.

  42. Laura @ 42:

    I was thinking in terms of you having the chance to learn from the errors and correct decisions made by your parents and the chance for you to adjust to an irregular income. (G) Your father seems to be one of the more stable business-oriented writers in the mid-west but that is NOW. I had forgotten to adjust for how things might have been back when you were younger. (Being younger than I you must have missed making your own shoes from mammoth hide. My parents, of course, did not have that luxury since mammoths had yet to evolve.)

  43. One thing I can say anecdotally – even those in the financial industry are just as bad with their money. My wife was a 15 year banker (as she likes to say) when I met her – running a large branch in the NYC metro area. Savings? Nada. When I asked her why, since I had naively assumed she knew something, her response was, “my budget is pay the bills, spend the rest”. Made my miniscule savings look positively awe-inspiring.

    One thing that hit me strongly regarding this – I am in the tech field – was at a retirement lunch years ago for a branch chief. When asked for some words, he said “Plan now for retirement. Not when your my age. Now.” Best advice the 30yo me ever got.

  44. It’s definitely not just writers. In my professional capacity I spend a lot of time going through other people’s finances, and the levels of ignorance about really basic financial issues is frightening. Interest rates, for instance, are a mystery to an awful lot of people.

    I spent a long time last week explaining to one guy (who was running his own business) the difference between turnover and profit. I don’t think he believed that there was one.

    I do think that basic financial concepts need to be taught at an early age, and as so many adults don’t understand them, doing it in schools rather than relying on parents is probably the only way. I suspect that it’ll be a very slow process, though.

    I think I’m very lucky in that my parents had pretty good financial habits, so I had good role models. It must be much harder without.

  45. A large part of selling books is to try and make authors sound as much like Hollywood powerhouses as possible — non-fiction authors are presented as successful and wealthy, like directors or studio execs, and therefore you should buy their book to find out about how they got that way, and fiction authors are presented as glamorous and like actors. Publishers release news of big acquisitions and print runs, just like movie box office and budget news, etc. So of course lots of people think writers are rich. Did you see The Proposal? That was just the portrait of editors. (Reverse everything you saw in that movie to understand how editors actually live.)

    People do understand that writers struggle in the gutter, but once you are published, they assume the money rolls in. And it does in tiny amounts — about six months after a sale, and nearly a year for any first royalties. And that’s the publishers who are following the contract rules. Large advances are broken down into four-eight payments that may take several years to pay out. Yet even SFF fans — who get to spend a lot more time interacting with writers than others usually do — don’t want to accept the idea that publishing is cash poor and authors even poorer.

    And right now, the number of authors in distress is just really scary. The number one advice fiction authors get is don’t quit your day job. But now everybody’s getting laid off from their day jobs.

  46. I am grateful every day for my day job, without which I could not write fiction. I’m notoriously risk averse when it comes to money, so there’s no way I will give up the day job until the time that my writing income fully replaces it (and that means health insurance too).

    It really helped when we got an accountant too. I found that I could relax knowing that a person with a head for the tax code could take care of all of this stuff.

  47. Minor correction: your link for credit card balances actually says:
    The average credit card balance for those carrying a balance rose 30 percent between 2004 and 2007 to $7,300, according to figures released today by the Federal Reserve.

    I will readily concede that the difference between ‘per cardholder’ and ‘for those carrying a balance’ doesn’t make any difference to your argument, but it’s a common way for debt figures to be misquoted and it does make a difference in some contexts.

  48. Writers and money…. Wow. JS, I think you could write a dozen posts on this topic, and only scratch the surface!

    As someone who just made his first pro sale — yay, me — I’m trying to approach this entire racket as pragmatically as possible. I even sat down and said to myself, “What are my goals with this thing, and when will I consider myself to have been successful?”

    I was surprised at the conclusions I reached. Mostly because they didn’t have a dang thing to do with awards, and when it came to money, I basically set it up so that I can only quit my day job when the mortgage is entirely paid off and I have the equivalent of the full mortgage in savings in the bank. For cushion. Because it seems clear to me that subsisting on fiction writing is as wild and risky as it’s ever been, and while I’d be lying if I said I didn’t dream of fiction freelancing full-time, I’m not willing to make that jump until a) I’ve gotten more than enough big sales to justify it and b) the family is financially secure for several years — even if all freelance income dried up entirely.

    Perhaps this means I never make the jump? Maybe I’ll never bring in enough from fiction to justify quitting the day job and working for myself exclusively. A few years ago, I’d have been horrified at that idea. Now, I am OK with it. I’d much rather keep my “mundane” desk job than be one of those unfortunate freelancers who quit their jobs too soon, then spend all their time kvetching about bills and hardship as a result. To my mind, if you’re not financially solid before you try to freelance full-time, it’s pretty certain you sure as hell won’t be financially solid after you make the jump.

    And yes, everyone here who says it’s unfortunate nobody teaches you basic finance in school, is correct. Now, everybody is getting a crash course in finance, whether they wanted one or not, because the economy is in such a prolonged trough.

    The Great Depression scarred several generations of Americans, such that they became financially conservative to a fault. Perhaps this so-called Great Recession will do the same? I kind of almost hope so, because it’s not just the politicians who are financial dunces. It’s the majority of Credit Economy America as well.

    I hope everyone is hanging in there, regardless. My wife and my daughter and I have been fortunate thusfar, during this crisis. In fact, lots of very good things have been happening for us, while many families around us have had — and will continue to have — a hard time of it.

  49. I hate to get political, but the credit and mortgage part of the economy that normal citizens dealt with was a small portion of the real damage done by the crash. Most of the damage was done my massive financial organizations gambling on paper castles.

  50. @40–Thanks for the clarification, but that only means that he got (relatively) lucky that his creditor was inept. His story is still sad, and the underlying point remains.

  51. excepting possibly accountants, and honestly I wouldn’t even put it past them

    Hehe, I knew that CPA certificate would give me bragging rights someday.

    I’m putting away over half my income, so I guess some stereotypes are true.

  52. JJ,

    Yes and no. The subprime crisis was actually both. People borrowed money they couldn’t afford to pay back, while other people repackaged the bad loans and gave them ratings that were way too high, with the government (both parties really) nodding and winking in the name of social justice.

    So when the economy took a normal downturn, we ended up with giant companies like AIG in the same hole as John Q Subprime Mortgagee. A lot of us think the big players should have been allowed to fail, or at least been broken up into pieces small enough that they couldn’t get the whole economy in trouble again.

  53. I find this article quite informative, and reminds me a little bit of my fellow architect colleagues. We’re more about ideas than about financial practicality, and our business model is similar to writers- do the work and deliver it to the client first and then wait to get paid (if ever). And everybody thinks we’re rich because we propose to build expensive things and we sometimes dress fashionably.

    I’ve written blog post long ago about what makes architects tick at the link below:

    http://architectureandmorality.blogspot.com/2008/07/archi-types-opposite-personalities-and.html

  54. We need writer’s bailout.

    We all voted for Obama, so why is he still bailing out the cronies in WallStreet but not his voters?

  55. “We need writer’s bailout.”

    We need writers and others to be smarter about their personal finances, both in the short run and for the long-term.

    Beyond this, I’m noticing that some of the new folks coming in appear to want to make this thread about partisan politics, which a) is largely aside the immediate topic and b) really boring. So, you know. Stick to the topic, please, and try to avoid the vomiting up of gratuitous political snark.

  56. In my (private) high school, standard Economics was a required course for seniors. Every year, the teacher stood up in the front of the class and gave something of a prepared speech, the basics of which is: “I can start from page one of this book and you can be able to skip the first semester of economics in college, if that’s they way you’re going, OR, with a unanimous class vote, I can give you a personal finances segment before starting into the text. Choose.”
    Since she had started the options, I don’t know if she ever taught the complete book course. Conservative budgets came instinctively to me (my father was in a math-instesive tech field but, just like publishers, big companies don’t always want to pay small subcontractors money when they’ve contracted), but a really good breakdown of loan, mortgage, and rental terms was very useful. For example, I got one of the much-maligned ARMs (adjustable rate mortgages), but since I knew what I was getting into I probably actually saved myself upwards of 10k spread over the time I was in that house. But that came after I told one realtor who only wanted to show me houses 50k over any budget I mentioned to take a hike and I told the loan officer who said I could afford to buy a 500k house to get their head examined. People actually believing nonsense from “experts” in direct contravention to current reality is not a new phenomenon, but I bet there would be a lot fewer foreclosures if more people had gone in equiped with a clue (not all, of course. Life happens in unpredictably ugly ways sometimes).

  57. We need writers and others to be smarter about their personal finances, both in the short run and for the long-term.

    It’s definitely not just writers. Realizing that my parents and their friends have about as much in retirement savings at 55 as I do at 35 was a sobering moment, as it came home to me that my wife and I (and TallDave, it would seem) were the exception to the rule.

    And I think it’s worse than just the financial education gap; it’s compounded by our collective aversion to delayed gratification. Fewer than half my co-workers contribute to their 401(k), even though the company matches contributions. They’d rather take the 3% to spend now than get 6% to spend in the future!

    Even those who start saving up can get sidetracked. How many college funds or retirement funds or rainy day funds have been started, only to disappear a couple of years later because a really good deal for a vacation or a boat (or, worse, a medical emergency) came up? You try to do the right thing, but a moment of weakness or a stroke of bad luck sets you back five years in the blink of an eye.

    And then you see those who’ve done a really good job of saving over the years, who suddenly see their efforts chopped in half because their investments just went down the toilet. Witnessing that, who could blame people for walking away from what looks like a sucker’s bet?

    It frightens me that there are a hundred million people who will depend on their children to support them, either directly or through payroll taxes, through their retirement and old age. I don’t think it’s a sustainable model, and I fear what happens when it can no longer be sustained.

  58. Since Mittlebenskrise was such a big hit a couple of Big Idea threads back, let me lay another great big German word on you: Künstlersozialkasse. (Don’t worry, the umlaut is free.)

    It’s basically Social Security and health insurance wrapped together for anyone who is a full-time artistic type. You’re eligible if you’re a self-employed musician, actor, graphic artist (illustrator, painter, etc), sculptor, author, journalist, critic, translator and so on. You pay the typical employee half of insurance premiums, your customers pay another set percentage (based on what they pay out to all their freelancers, not just you particularly), and the national government subsidizes the remainder. The health coverage is like all other public options in the country, which is to say good. There are lots of little rules (it’s Germany!), but on the whole, it’s an important safety net for people in the creative sector. It was established by law in 1981, so it’s not like you had to have had Bismarck in charge to make this work.

    All in all, an idea worth stealing. Now, who knows a senator or two?

  59. Little different perspective.

    I’m a SW Engineer (30 years, now, of writing code for money), and I’ve spent half my career working in large high-tech companies, half my career working in startups, and the third half (ha!) running my own software consulting and publishing businesses.

    The first (large companies) was miserable – lots of resources, but little view of what difference you were making in the world. Pay was OK, but tended to flat-line, unless you were company hopping from year to year. I went a long time without ever getting laid off, but I quit a few jobs.

    Startup companies were a blast – generally, plenty of money, lots of knowledge of how you’d affect things, but you generally make the mistake of what I call “sick-puppy syndrome” – you get emotionally attached, and lose perspective. End result – you stay too long, or you put your own money into the startup, and heartbreak follows.

    I did 10 startups in one 8 year stretch…never put a dime into any one of them, but never had one take off, either.

    Working for myself is the best – I pick the hours, I’m motivated by my knowledge of what I can earn per hour (my rates range from $50 to $225 an hour, averaging around $85). I have complete knowledge of what the government is doing to my income (it ain’t pretty – I may “go galt”).

    The downside can be stretches without work, but those have been very minimal – less than 4 months in the last ten years, with about half that being try-outs for retirement (spouse finally said “you can’t retire until I do!” I was having too much fun while she was working, clearly.).

    I actually spend quite a bit of time looking for good SW engineers to match with projects I haven’t time for – it is a good time to be a SW contractor, as businesses don’t want to hire, and are willing to trade off paying a bit more (and not retaining project context) in return for more flexibility on the staffing side.

    Now, I am so very, very glad that one of the required courses my senior year of college was “finances for engineers.” One of the engineering profs, who had done well for himself, came in, and *educated* us on personal finance. Savings, investing, borrowing (how, why and when), the value of owning real estate, how to start a business, how to read a contract, the dangers of credit, types of credit, the whole she-bang!

    Career advice, too – how to get promoted, how to write effective reports on your work, office politics, reading people, recognizing situations, how to turn crisis into opportunity, etc.

    Graduated from a podunk state school with good, not great, grades, and had 27 job offers in hand, largely due to my interviewing skills.

    Two years out of college, I had been promoted three times, increased my salary by 30% in my daytime job, and was pulling down 2X my regular daytime salary with my first consulting company, plus publishing software packages for a specialized slice of the IT community.

    Debt free after the fourth year. Payed off those college loans early. Pay cash for new cars, or lease cars for business. Only long term debt is on real-estate, which, come Monday next, is down to the family home (started selling my business real-estate about three years ago, sold off my rental houses before the elections, just sold the second family home that the mother-in-law was residing in this week).

    I use credit cards, but pay them off on the 1st and 15th of each month. No interest charges, ever.

    No debit cards, ever. No reason to have them – use cash or checks, or enjoy the extra protection the credit card gives.

    Credit score is currently around 800-810.

    I now work about 4/5 time, only on fun projects, and plan on doing so until retirement, about another 5 years.

    Thank god for that personal finance class!

    That, and choosing the finest woman in the world for a spouse.

    Bottom line:

    You get out of life what you put into it. A good attitude, some good skills, and the knowledge that *no one* owes you a living, and suppressing the desire to have *everything right now!* will take you a long way.

  60. It wasn’t snarky. It was tongue-in-chick.

    Only the writers could live in such a delusion and pretend what happens in politics doesn’t affect their pocket book.

    Sorry for waking you up. Please go back to your dream.

  61. Bill Shakespeare:

    “Only the writers could live in such a delusion and pretend what happens in politics doesn’t affect their pocket book.”

    Only the fatuous, hiding behind the names of their betters, would confuse the pointless political bloviating they’ve offered for a serious discussion of politics and the economy, Bill.

    You run along now.

  62. Interesting. I would add that the cities writers are drawn to also happen to be the most expensive places in the country to live. I doubt I could afford an artist’s garret in Manhattan. Hell, I don’t think I could afford to live in a refrigerator box in Central Park and I have a steady job and a middle class income.

  63. Writing is a business. Yet, I don’t remember ever sitting next to a writer in any of my business classes. I think that writers write because they love it. That is problematic because it conflicts with the goal of any business, to make money. The goal is not to write, but to make a profit by writing.

  64. John Minahan:

    “I think that writers write because they love it. That is problematic because it conflicts with the goal of any business, to make money.”

    Well, I think they are two different goals. I would write even if I didn’t make money from it; but since I can make money from it, I try to. I do think people who decide to also engage in commerce when they engage in writing need to be aware of the business aspects of it.

  65. I’m in total agreement with ADifferentJohn @33 and I really like Nony’s anecdote @62. Whatever the stated purpose of our public schools, there are many ways in which they are failing to properly serve our kids. The absence of a basic financial education is a prime example of this failure.

    Whatever one may think about the relative culpability of individual, lender, and policysetter in the mortgage crisis, I strongly believe that a major component was a lack of basic financial knowledge on the part of the consumer and that our educational system is primarily at fault for that ignorance. “I just assumed that the bank wouldn’t offer me a risky loan and so I didn’t try to figure out what I could actually afford” is a pitifully poor excuse, in my book.

  66. Brian @73 wrote: “I just assumed that the bank wouldn’t offer me a risky loan and so I didn’t try to figure out what I could actually afford” is a pitifully poor excuse, in my book.

    Up until the last few years, banks made money on mortgage loans based on borrowers actually repaying said loan plus interest. It was in the best interest of the banks to ensure the borrower’s ability to repay, so they required all kinds of financial information from the borrower before making such a loan. The bank also used that financial information to determine what amount the loan should be to meet their level of acceptable risk. The bank’s success, if you will, was directly tied to the borrower’s success. So the borrower relied on the bank to know what it was doing. While this does not excuse the borrower from the responsibility of understanding his/her own financial situation, neither was it an unusual approach. I would go so far as to say that it was more common than not.

    What caused much of the mortgage crisis was the ‘uncoupling’ of the bank’s and the borrower’s best interest. The bank no longer relied on the borrower to repay in order to make money; it made money by repackaging and reselling that loan, along with many many others, to another entity. Suddenly, it was possible for the bank to make money regardless of the borrower’s ability to repay, so it made as many loans as it possibly could. No amount of basic financial knowledge could have educated your average, or even above-average, borrower about this dramatic shift in the mortgage/banking business. And still, the “I just assumed that the bank wouldn’t offer me a risky loan…” part holds true. It’s just that the bank is only concerned about risk to itself, not to the borrower.

    None of this absolves the borrower of responsibility, of course. As I said before, one should have a basic understanding of finances and one’s own financial situation. But is it a “pitifully poor excuse”? Not so much.

  67. I should note that my use of the term ‘bank’ in my earlier comment is interchangeable with ‘financial institution’ and ‘mortgage originator’ and probably some others I can’t think of right now.

  68. As a mere “reader” and average person, I have to say that I knew writers didn’t get paid much per book, but I didn’t realize how bad it was.

    I would honestly prefer to get a PDF (or some other format of book) and just pay the writer directly…cut out the middle man.

    The influx of money wouldn’t be any more steady, but at least you’d get a larger chunk (100%) per book.

    Piracy already exists for books and likely wouldn’t increase because of a shift like I suggest and while a person might not be able to pay $20 for the newest book, most would be willing to chip in something (as compared to nothing).

    Is this horribly naive?

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