Pre-Vacation Update

I’m going on vacation TOMORROW, y’all.

Six days at Walt Disney World, six days in Portland, Oregon to celebrate my grandfather’s 90th birthday, and three days of post-travel recovery (resting, restocking groceries, getting over any crud I might catch along the way) at home.

I gave myself the three extra days first because I subscribe to Kelly Conaboy’s It Should Be Vacation + One Or Two Days theory — “after you return from vacation you should have a mandatory one- or two-day period to readjust before you go back to normal life” — and second because I told myself that the one thing I was going to do in 2019 was take two consecutive weeks off.*

(I have not done this in forever. My last vacation was four days long.)

I will not be posting on vacation, so here are some updates before I leave:

  • I went through and blocked out the rest of NEXT BOOK’s plot using the technique I showed you last week, which means I know where I’m going with the draft and all I have to do is use Jami Attenberg’s 1000 Words of Summer (write 1000 words every day between June 17 and July 1) as motivation to finish it up.
  • I also gave NEXT BOOK a title: A COINCIDENCE OF DOORS. I am fighting very hard against the impulse to make the cover look like a door that you open to read the book, because that is not the Trend For Covers These Days and I know I need to put a Dreaming Woman on the front. (I wonder how much it would cost to do one of those covers where it looks like a door with a cutout keyhole that you can see through and then when you open the door you can see the full-color illustration of what’s behind the keyhole. This is also not On Trend, but it would be super-cool.)
  • I’m also fighting very hard against the whole “what if I was able to get this book self-published this year” thing. I want this book to be THE BEST IT CAN BE, not THE FASTEST IT CAN BE. (I’m also thinking about how much money I’m willing to put towards “the best,” but that’s a discussion for another day.)
  • I’ll owe you a financial update while I’m on vacation, so here’s the gist: May was my highest-earning month EVER. I brought in $13,311 in freelancing income and $14.51 in publishing revenue. I also got a $1,337.74 tax refund I wasn’t expecting because it turns out I did my taxes wrong (long story, can tell you when I get back if you want, good to know the IRS keeps an eye out for your mistakes). Current net worth is $116,293.34.
  • However, this vacation is going to cost me roughly $4,500 in unearned freelance income (which is to say that if I weren’t going on vacation and were able to complete my usual schedule of work, I’d earn $4,500 over the next two weeks). This is in addition to the $2,200 budgeted for the Disney trip and the $1,100 budgeted for the family trip. Soooooooooo…. actually, I’m fine with this. Paid time off is great, but I’d rather be a freelancer any day of the week. (Including the vacation days.)

See you all in June! ❤️

*Yes, I did realize that Thursday to Thursday to Thursday is actually two weeks and one day. Bonus!

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One More Thought on The Hustle

Look, I’m not saying I agree with Danielle Steel, but this is an interesting piece of synchronicity:

Steel struggles with the idea of burnout culture, the “millennial affliction” of being completely exhausted by work and the world. She recounts a conversation with her son and his partner; both are in their twenties. Her son told her that he never works past a certain time at the office, a model of that elusive work-life balance. Steel balks. “They expect to have a nice time,” she says. “And pardon me, but I think your twenties and a good part of your thirties are about working hard so that you have a better quality of life later on. I mean, I never expected that quality of life at 25. I had three jobs at the same time, and after work I wrote. Now it’s a promise that it’s all going to be fun.”

Read the full article at Glamour, just because it’s great (Danielle Steel writes at a desk shaped like giant Danielle Steel books, for starters), and then… um… think about how that quote ties in to everything else I’ve published this week:

Brandon Stanton’s thoughts on when to hustle and when to ease up

My review of Juliet’s School of Possibilities (and its reference to my review of Cal Newport’s So Good They Can’t Ignore You)

Em Burfitt’s guest post on why she likes writing for content mills (for now)

There does seem to be an unexpected theme here, even though I am also very very very very in favor of work-life balance. You hustle better if you give yourself time to rest between sprints, after all. ❤️

When to Ease Up on the Hustle

I don’t know if you saw this tweet or not, but I’ve been thinking about it all weekend:

The screencapped text is from Brandon Stanton’s Patreon, and I will admit that I feel a little weird about sharing text he originally reserved for Patreon subscribers (and did not elect to tweet himself, as you’ll notice), but maybe more people will subscribe after seeing the tweet? Or at least that’s what I’m telling myself?

Anyway, if you don’t want to read tiny print, here’s the important part:

I think for every successful artist and entrepreneur, a good portion of their psychology remains anchored in the early days. When nothing was working. When nobody cared. When nobody was paying attention. When it felt like you were in a giant hole and the only way out was to work harder, and harder, and harder. And you were always scared that you were going to fail, unless you stay focused. And don’t stop. Don’t ever stop. Then suddenly it’s ten years later, and somehow you’ve made it. But you feel like the only reason you made it is because you didn’t stop. And you must keep going. Because there’s an hour of daylight left. And you can still fit in one more interview…

But you shouldn’t.

Because things are different now.

Things are definitely “different now” for me. I’m not worried about whether I can pay my rent this month, or whether I’ll be able to build a career and a reputation as a writer. On the other hand, I’m nowhere near the point where I can afford to go without continuous paying work—and I’m smart enough to know that if I want to keep booking work a year from now or two years from now, I need to keep building my skills and portfolio and network and readership.

So in my case, it’s figuring out the balance between not hustling every second and not letting my hustle slide to the point where I’m not growing.

I am very sure I haven’t found that balance yet.

What about you? ❤️

May Financial Update

First of May, first of May, financial updating starts today…

(Or continues, really. I’ve been doing this for years.)

My current net worth is $107,801.44, which is $5,054.69 higher than my April net worth of $102,746.75.

This is nearly entirely due to investment growth—I got a 4.3% return this month—which, even though I knew this kind of thing would start to happen once my net worth passed the six-figure mark, still feels really weird.

I received $9,300 in freelance checks last month plus $43.20 in publishing royalties, and I anticipate breaking $10K in freelance checks in May. June, however, will probably be a low earnings month, since I am taking a two-week vacation (five days at Walt Disney World, five days at a family event, a couple days at the end to rest from all the travel) and won’t be writing or earning money during that time.

This also feels a little weird—it’ll be the longest chunk of time I’ve taken off work ever, I think. I’ve done a week away from work in the past, but I don’t think I’ve taken two weeks off, even back in my employee days.

But I did set myself the goal of taking a two-week vacation in 2019, and now I get to see what happens.

In terms of spending: like many people who discovered their tax burden was lower than anticipated, I took that extra money and let it blow a hole straight through my pocket. I bought $63.13 worth of plants. I got myself a $15.99 gym bag that I didn’t even need (my old one was still functional, I just wanted one that had a pouch for a water bottle). I spent an unbelievable $126.62 on dining out—and before you start laughing, remember that I typically spend $25 per month on restaurants and snacks, and okay, you can laugh now.

Yes, I live a very frugal life, and yes, I’m steadily increasing my monthly freelance earnings, and yes, I’m investing a lot of those earnings—and so this is what my finances are starting to look like.

It’s weird.

I’m very happy with it, but I’m not used to it yet. ❤️

My 2018 Tax Summary

When I wrote for The Billfold, I shared “everything I paid in taxes” posts—and since I don’t see any reason not to continue doing so, here’s a summary of my earnings and taxes for 2018:

  • Business income minus loss: $67,700
  • Total income including interest and dividends: $67,884
    • HSA deduction: $3,450
    • Deductible part of self-employed tax: $4,783
    • SEP IRA deduction: $12,583
    • Traditional IRA deduction: $5,500
    • Self-employed health insurance deduction: $3,243
  • Adjusted gross income: $38,325
    • Standard deduction: $12,000
    • Qualified business income deduction: $5,253
  • Taxable income: $21,072
  • Self-employment tax: $9,566
  • Total federal tax: $11,897
  • Total Iowa state tax: $1,724

I ended up underpaying my federal tax by $454 (which meant my estimated tax payments were really really close) and overpaying my Iowa tax by $1,416 (which meant that my estimated state tax payments were way off).

I was able to keep my health insurance subsidy for 2018, probably because I made the maximum HSA, IRA, and SEP IRA contributions and got my AGI down to a subsidizable level. I plan to do the same thing this year; I’ve already claimed the health insurance subsidy and will max out my deductible account contributions to keep it—why pay extra health insurance premium money when you can stash those dollars in a retirement account, after all?

My Iowa tax refund is going to pay 2019’s estimated taxes, and I’ve already made my first federal estimated tax payment for 2019, in the amount of $2,820.

Soooooo… that’s how I did this year, tax-wise.

How about you?

April Financial Update

It’s time for another financial update, so let’s check in with my YNAB account:

My current net worth is $102,746.75. That’s up $5,463.23 from my March net worth of $97,283.52. Total freelance earnings for March (including self-publishing royalties) were $7,388.57, so that was part of it, but my investments also did pretty well; according to Vanguard, I gained $1,896.37 in investment returns in the past month.

I spent $2,676.47 in March on personal expenses and $212 on business expenses. The personal expenses number is higher this month because I started making purchases towards both a personal vacation and a family trip, both of which I’ll take in June; February’s $1,212.15 represents a more typical personal expenses month. (Yes, that includes rent-bills-food-fun-everything.)

According to the financial independence calculators, I should hit FI in April 2030, eleven years from now.

I’m still going to try to beat that goal. ❤️

Why Financial Independence Is Like Self-Publishing

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.

March Financial Update

It’s a new month, which means it’s time to check in with my finances.

Here’s a YNAB chart illustrating my net worth, which is $97,283.52 as of this morning:

Currently, my investment balances total $85,296.36, divided as follows:

  • Vanguard brokerage account: $6,401.14
  • Vanguard traditional IRA: $12,078.77
  • Vanguard rollover IRA: $45,534.32
  • Vanguard SEP IRA: $6,484.87
  • Vanguard Roth IRA: $6,685.68
  • TIAA annuity: $5,348.99*
  • Health savings account: $2,744.59

The big gamechanger this month was the money I put in my brand-new SEP IRA: $500 for 2019, and $6,000 for 2018. The latter investment came from money that was part of The Billfold LLC account, which is much better off invested in a SEP IRA than taxed (though it will be taxed eventually).

In case you’re curious, it has cost The Billfold LLC $1,399 to shut itself down so far. This money includes CPA and legal fees, and there is at least one more payment coming as I file the final paperwork. That money also came out of The Billfold LLC account.

I received $5,135 in freelance checks in February, and earned $12.24 in publishing royalties from Amazon. I spent $1,212.15 on personal expenses (rent, bills, food, fun, donations, etc.) and $187.33 on freelance business expenses, not including money put into investments or set aside for taxes.

According to my financial independence forecaster, I should hit FI in 12 years and one month. However, now that I am no longer giving the majority of my time to The Billfold, I’ve been able to take on several higher-paying long-term assignments, which means I’ll probably be able to save and invest additional earnings (especially in my SEP IRA, which can absorb up to 25% of my freelance earnings as tax-deductible contributions).

So I’m very interested to see whether that forecasting number changes by the end of March.

Why am I telling you all of this? Because I’ve been transparently sharing my finances online since 2012, when I was making $500 a week as a brand-new freelancer.

Because I want to present a realistic picture of what a mid-career freelancer (and author, and teacher) can earn.

Because I know that the type of freelancing work I’m doing won’t last forever — the internet might fundamentally change, robots might start grabbing all of the good copywriting jobs, companies might want to work with younger freelancers who know all the dank memes — and so I’m investing in my future by trying to save as much money and grow my net worth as quickly as possible. Even if I don’t hit financial independence, being able to set money aside while I have the privilege to do so will give me more choices in the future. 

So that’s my March financial summary.

We’ll check back again in April.

*When I worked as an executive assistant for a non-profit, I invested in a TIAA 403(b). I was able to roll everything over into a Vanguard rollover IRA except for this one non-rollable TIAA annuity that TIAA told me I’d have to keep until I retire, I guess. If anyone has any suggestions on how to get that money out of TIAA and into Vanguard, let me know.

In Which I Learn About Andrew Yang’s Presidential Campaign and GET VERY EXCITED

I have never been a hugely politically active person. I vote, even in local elections, and I take the time to research the candidates and their positions before voting, which probably makes me more politically active than most — but I view our current political system through a somewhat skeptical lens and because of that have hesitated to get emotionally involved.

But I had downloaded a few episodes of the Ezra Klein Show to listen to as I did laps at the YMCA (you might remember my referencing the episode where N.K. Jemisin discussed worldbuilding), and one of them was this episode from August titled “Is our economy totally screwed? Andrew Yang and I debate,” and about halfway through the episode Andrew Yang mentions that he’s running for president.

On a platform of universal basic income (renamed “Freedom Dividends,” after Yang did some market testing to see which name would appeal to conservatives) and Medicare for All.

I have now gotten emotionally involved.

If you’re currently thinking “who is Andrew Yang and what is his deal,” which is where I was 48 hours ago, the shortest version is that Andrew Yang is an entrepreneur and nonprofit CEO who has done some serious thinking about the mathematics and logistics required to keep America’s economy going as we transition into a world with more automation and fewer jobs.

It’s the math-and-logistics part that made me decide to do anything I could to support Yang’s candidacy, starting by spreading the word on my blog.

I mean, this whole thing is extremely relevant to the core mission of Nicole Dieker Dot Com, not to mention the core mission of Nicole Dieker, the Human Person. Andrew Yang’s vision, which includes giving every American adult a Freedom Dividend of $1,000 every month, plus Medicare for All, plus social credits (backed by the government and redeemable at various retailers) for those of us who want to spend our time on non-market-based work like caring for others and community-building, will help us all get so much closer to THE WORK we want to do and THE LIFE we want to live.

So.

Here’s what you need to do next: go listen to and/or read the transcript of this Freakonomics podcast episode, in which Andrew Yang explains his plan to Stephen Dubner. With all due respect to Ezra Klein, the Freakonomics podcast offers a much better introduction to Yang (you’ll learn about his love of Dungeons and Dragons, as well as his brief stint selling Cutco knives) and an extremely detailed summary of how Yang plans to put his ideas into action:

YANG: So the headline cost of this is $2.4 trillion, which sounds like an awful lot. For reference, the economy is $19 trillion, up $4 trillion in the last 10 years. And the federal budget is $4 trillion. So $2.4 trillion seems like an awfully big slug of money. But if you break it down, the first big thing is to implement a value-added tax, which would harvest the gains from artificial intelligence and big data from the big tech companies that are going to benefit from it the most.

So we have to look at what’s happening big-picture, where who are going to be the winners from A.I. and big data and self-driving cars and trucks? It’s going to be the trillion-dollar tech companies. Amazon, Apple, Google. So the big trap we’re in right now is that as these technologies take off, the public will see very little in the way of new tax gains from it. Because if you look at these big tech companies — Amazon’s trick is to say, “Didn’t make any money this quarter, no taxes necessary.” Google’s trick is to say, “It all went through Ireland, nothing to see here.” Even as these companies and the new technologies soak up more and more value and more and more work, the public is going to go into increasing distress.

So what we need to do is we need to join every other industrialized country in the world and pass a value-added tax which would give the public a slice, a sliver of every Amazon transaction, every Google search. And because our economy is so vast now at $19 trillion, a value-added tax at even half the European level would generate about $800 billion in value.

Now, the second source of money is that right now we spend almost $800 billion on welfare programs. And many people are receiving more than $1,000 in current benefits. So, we’re going to leave all the programs alone. But if you think $1,000 cash would be better than what you’re currently receiving, then you can opt in and your current benefits disappear. So that reduces the cost of the freedom dividend by between $500 and $600 billion.

The great parts are the third and fourth part. So if you put $1,000 a month into the hands of American adults who — right now, 57 percent of Americans can’t pay an unexpected $500 bill — they’re going to spend that $1,000 in their community on car repairs, tutoring for their kids, the occasional night out. It’s going to go directly into the consumer economy. If you grow the consumer economy by 12 percent, we get $500 billion in new tax revenue.

And then the last $500 billion or so we get through a combination of cost savings on incarceration, homelessness services, health care. Because right now we’re spending about $1 trillion on people showing up in emergency rooms and hitting our institutions. So we have to do what good companies do, which is invest in our people.

Then you’ll want to visit the Yang 2020 website and check out the policies section. He’s got goals and guiding principles for everything from combating climate change to making taxes fun.

To quote the Iowa Democratic Party Leadership: “Mr. Yang has three Big Policy Ideas — Universal Basic Income, Medicare for All, and Human Capitalism — all supported by the most comprehensive and detailed set of policy proposals we have ever seen at this stage of a campaign.”

(Go find out more about the Human Capitalism thing here.)

Lastly — and I can’t believe I’m ending this with a sales pitch, but that’s politics — you could consider giving Andrew Yang a dollar. Or more dollars, but the amount you give isn’t the important part right now. Because of the way the Democratic Party runs its show, Andrew Yang needs 65,000 individual campaign donations by May 15 to be able to participate in the upcoming Democratic candidate debates.

As of this writing, he’s at 33,675.

I’m going to support Yang 2020 for as far as it goes — I’ve joined my local Yang Gang, I’m going to the breakfast with Andrew Yang in Cedar Rapids, I might even do some phone banking — and even if it doesn’t end up in the White House, Andrew Yang has a plan for that, too.

The part of me that is still cynical about politics wants to know how Yang plans to deal with Congress, roughly half of which is incentivized to prevent him from achieving his goals. But the part of me that wants to take up my bow and arrows and follow this person I just met in a tavern and go fight some dragons with MATH AND LOGISTICS is… well, I can’t believe how much I wanted something like this until it became a possibility. ❤️