As of this morning’s freelance paycheck, I have $100,203.85 in assets and $825.44 on two credit cards that will both get paid off tomorrow, giving me a total net worth of $99,378.41.
I mean, I’m more excited about the “$100K in assets” figure, since I’ve been working towards that goal for a while (even though I know I probably won’t hit a for-real six-figure net worth until I get my next freelance paycheck).
After this, I guess the next big goal is a total investment portfolio value of $750,000, which — at the recommended 4% annual withdrawal rate and the level of frugality I’ve managed to maintain since college — should render me financially independent.
In other words, I’ll be able to live exclusively off my investments if I choose.
The various online calculators suggest this will happen in the next 10-12 years. I am smart enough to understand that other things may happen in the next 10-12 years to shift that goal, but optimistic and/or dedicated enough to decide it’s a goal worth working towards regardless.
Being able to live half off my investments and half off my freelance writing and teaching and self-publishing income, for example, would also be good.
There are a lot of potential success scenarios here.
There are also a lot of potential success scenarios for a self-published book — like, it’s literally the first lesson I teach in my online Finances of Self-Publishing course (which you can take next month, sign up here).
You could write a runaway bestseller; you could write and publish a book a year and sell it to your 1,000 True Fans; you could write a book to preserve a piece of family history and use tools like Reedsy and IngramSpark to create a beautiful hardback copy that’ll last for generations.
Self-publishing can also get you many of the aspects of “the author’s life” that a lot of us dream about: a book launch party with cake and sparkling beverages, the opportunity to do readings and signings at bookstores and libraries, the professional expertise required to teach classes or speak on panels at conventions. A quiet home office with plants in it. The ability to say “I will block off X amount of time, every day, just for writing my next book.”
(Current NEXT BOOK draft: 12,253 words.)
Of course, you can get the plants and commit to a writing schedule before you finish that first draft — and if you want to learn more about how to do that, you should sign up for my online course How to Develop a Writing Practice, which runs end-of-April through end-of-May. (It’s a self-paced group course, so you’ll take it as a group but won’t have to be at your desk at any specific time for mandatory webinars or anything like that. You’ll be free to do the readings, chat in the group discussion forum, etc. whenever you have time available.)
Just like I’m already thinking about myself as having committed to financial independence — and behaving and budgeting like a financially independent person might behave* — 10–12 years before I’ll actually get there.
But I thought, during my early-morning yoga practice where I usually get my best thoughts, that the whole financial independence thing was strikingly similar to the self-publishing thing. A nearly identical mindset.
Self-publishers take on both the author role and the publisher role. They develop various “success scenarios” for their books — maybe they want to crowdfund their “advance,” the way I did for The Biographies of Ordinary People; maybe they want to sell more than 500 Kindle copies in the first three months**; maybe they want to to go on book tour or get their book reviewed by Kirkus or submit their novel for various awards.
There’s a lot that a self-published author can’t control, such as who wins those awards or how much money Amazon pours into its Kindle Unlimited Fund or whether the market for their particular genre changes, but there’s a lot they can control through research and careful budgeting.
The biggest factor under their control is whether they spend more on their self-published book than they plan to earn (THIS IS THE NUMBER ONE MOST IMPORTANT THING I WILL TEACH IN MY CLASS, BTW).
That’s also one of the biggest factors that will determine whether they’ll self-publish another book and slowly build up a career as a self-published author.
Likewise, the person going after financial independence takes on both the worker role and the employer role, even if they already have another employer. This person is setting aside money for to pay their future salary the same way an employer sets aside money for payroll, and deciding how much they might want to earn in the future the same way an employer decides how much to pay employees.
There’s a lot that this person won’t be able to control, such as whether they get laid off (or lose their biggest freelance client) and have to cut back on their savings goals (or spend money they’ve already saved) until they find another source of income. They won’t be able to control market changes or recessions.
The biggest factor under their control is — you guessed it — whether they spend more than they earn.
Now, I know what you’re thinking, because several years ago I got myself into $14K of credit card debt during a period of underemployment. There are 100% for-sure times when you cannot spend less than you earn because you are simply not earning enough. I have been there. Lots of people are currently there.
If that’s where you are, and you’d like to not be there, I’d recommend reading Vicki Robin and Joe Dominguez’s Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence. This book should be available at your local library (get the 2018 edition if possible; if not, the older editions should be just as good though slightly less relevant to today’s economy) and it absolutely changed my life when I read it while working as a part-time telemarketer.
If you like cats and glitter, I also recommend Lillian Karabaic’s Get Your Money Together: An Illustrated Purrsonal Finance Workbook to Help You Budget Your Money, Save for Retirement, and Smash Debt. This book might not be available at your local library, but it’s exceptionally useful if — well, to quote Lillian Karabaic:
I only started teaching personal finance only because I was frustrated with the lack of queer-friendly, feminist, and, most of all, fun personal finance education out there — especially stuff that deals with actual real-life money issues and doesn’t assume you have one full-time job with benefits, 2.5 kids, and a white picket fence.
I’d also suggest reading Grant Sabatier’s Financial Freedom: A Proven Path to All the Money You Will Ever Need, because Grant devotes the first half of the book to “how to earn more money” and the second half to “how to become financially independent,” so if you’re interested in that, go check it out. Literally.
And if you’re interested in the finances of self-publishing, well… you could always take my class. ❤️
*Contrary to popular belief, “financial independence” doesn’t mean “having more money than you could ever spend.” It’s more like you’re paying yourself an annual salary based on your investment returns. Which means you’ll still need to stick to a budget, and in some ways you’ll need to be more careful about your budgeting and spending than a person who isn’t “financially independent.” After all, you want that pool of investment money to last for the rest of your life.
**The average self-published book sells fewer than 500 Kindle copies, so hitting this benchmark is an early sign of success.