Writer financial survival 101: multiple income streams

by Alexandra Sokoloff

Lisa asked this week if I would blog about my financial (read: survival) strategy of building multiple income streams. Well, okay, but I think it’s going to have to be a series!

The principle we’re talking about is like the financial strategy of a balanced portfolio.  A lot of people derive income from just their job, and so it’s devastating if anything happens to that job – as we’ve seen all over the country and for so many people we know since the financial crash four years ago. But there are other financial philosophies that would caution strongly against having income from just one source (and to cultivate as many sources of passive income, like investments and royalties, as possible.)  And the very interesting thing about consciously cultivating multiple income streams is that these don’t have to be massive rivers of cash to support you. Every stream is meaningful, and every stream will probably wax and wane.  If you’re invested in the stock market, you know sometimes a stock is up, and sometimes it’s down. But if you spread your investments over a wide range of KINDS of stocks, or sectors, and also have some of your savings in cash, and some in bonds, then it doesn’t matter so much if one sector is down, because your other sectors will cover the loss until that troublesome sector picks up again.

This works with this concept of income streams, too.

This week I’m going to talk a little about one of my income streams – the teaching, since I’m coming up on what may be my favorite teaching gig, the West Texas Writers Academy, at Texas A&M University.

This was not something I ever expected to be doing. But when sold my first novel and got involved in the conference circuit, I saw an opportunity to create an income stream that would be a no-brainer and actual fun for me.

The occasional teaching gigs I have, which are a very welcome income stream, I get because of my blog and because I go to conferences.

I’ve said here before that I started blogging on craft because I was out of things to say about myself.  Well, it’s true. But I also was being asked to teach screenwriting workshops at novel writing conferences, and I would always start those workshops like this:

“Who here lives in LA?”  (Almost never any hands up). 

“Who plans to move to L.A.?” (No hands here, either).

“Then you’re not going to be a screenwriter.  So here’s how you can use screenwriting tricks to write better novels, which is way more satisfying and more likely to earn you money anyway.”

It may sound harsh, but I think it’s despicable how many struggling screenwriters take money for teaching workshops on screenwriting and somehow fail to mention what the actual requirements of the job are. Selling false hope is a crime.  (Of course, if there are people in the workshop under 30 or so, who say they want to be screenwriters, I tell them to move to L.A. if they’re serious. Under 30 you still have a chance to catch that train.)

Well, people were responding so enthusiastically to the techniques I was teaching that I started blogging about what I was teaching, and teaching about what I was blogging, and pretty soon so many groups were asking me to teach workshops that I could never possibly do it and do all of my fiction writing, too, so I started asking for a lot more money for the workshops and choosing only places I really wanted to go. 

And that craft blogging and occasional workshop turned into a really nice double income stream when I wrote my Screenwriting Tricks for Authors workbook and put it out as an e book, and then wrote another and put that one up…. that’s now a very solid passive income stream (the very best kind, because it means the money flows in without me doing a thing) that I can count on every month, and I know I can always do another and create another income stream…

And more than that, it all turned into a kind of calling.

The thing is, I love teaching because it’s – well, performance.  These days I spend most of every day chained to a desk, and I do it because that’s how writing gets done, but it’s very hard for me to sit still and to be alone for such a large chunk of every day.  I spent OH so many years on the boards, or the street, elevators, balconies, wherever, all the world’s a stage…  and I still do the performance thing a couple times a year thanks to my friend, bestselling author/singer/goddess Heather Graham, and her gypsy theater troupe, the Slush Pile Players.  Yes, and there’s the occasional drunken karaoke.  I like to dress up, and sing and dance and have no boundaries with my fellow players. Steve asked last week about our reincarnational hangovers – well, the traveling theater troupe is surely one of mine. When I die you can bury me in unconsecrated ground with the other prostitutes-slash-actors, thank you very much; at least I’ll know I’ll be spending eternity having wild fun with wildly interesting people.

And I think I bring something a little different to the workshop experience for a couple of reasons.  First, I’ve taught dance, which is a very visceral and immediate thing to do.  And more than that, it’s so INTIMATE.  You need to figure out exactly what a dancer’s issue is and correct it on the spot (usually with a lot of touching) so they can do better on the next run-through, or maybe even break through to excellence. Well, that applies to writers, too – alas, without the touching. But one thing I’m really good at from dance is knowing how intimate the process is, and not being afraid to be intimate about it, so the dancer (or writer) isn’t afraid to be intimate, too. Otherwise – how are we ever going to engage our readers’ emotions, desires, and soul?

And then of course there were all those years of spitballing in film development meetings. When my first script sold, my partner and I had about a million meetings in the first two months, but one of the first was with a couple of young hotshot producers who are now film industry moguls, and in that breakfast (I think) meeting, one of them was prodding me to rewrite the script in front of him and I said, naively, that I would have to go home and think about it, and he said, “What kind of bullshit is that?  Tell me NOW.  I want to SEE you think.” 

Total, immediate awakening to what my actual job as a screenwriter was, which was to be creative RIGHT NOW, in front of whoever was asking me.  And be entertaining about it, too, by the way.

Well, so, from dance and from screenwriting, and from theatrical directing too, for sure, I’m very good at identifying the immediate creative problem and solving it right there.  I can do it pretty much on command. Which makes me a good teacher. I LOVE to solve story problems.  Please don’t ask me to play charades or Scrabble or chess, but if there’s a story problem?  I’m your girl.  Even if I’m asleep, the challenge will inevitably wake me up. I’m not unusual in that at all, that’s how creative people are wired.

But I never expected to be doing the teaching along with writing. In fact I resisted anything that resembled teaching for a very long time because my mother, the teacher, was always doing that really annoying thing that parents do with their creative offspring: “You know, you could always fall back on…”

(Personally I think I’m a professional writer because I refused to consider a fallback position.)

But it turns out that teaching a workshop maybe once every other month, and writing the Screenwriting Tricks workbooks one blog at a time, has been not just a practical supplement to my fiction writing income, but sort of lifesaving, psychologically speaking, because I’ve realized I NEED that interaction with creative people over creative ideas.  I need to be able to move around a big space and gesticulate wildly and joke with a room full of people once in a while to break the monotony of hunching over a computer.

Teaching opportunities abound for professional writers, and I’ve discovered they don’t have to take up a lot of time. They’re also a great way to have someone else subsidize my rather alarming and terribly expensive travel habit.  One huge upside of the author life is that you get to meet and befriend people from all over the country. One huge downside is that your friends are all over the country and you never get to see them except at conferences. Except now I can take a teaching gig nearby and see people I want to see.  Or even go someplace fabulous, like, well, the Gold Coast of Australia, where I’m doing a Screenwriting Tricks workshop in August.

It’s a perfect income stream for me because of all of the above and because of its infinite flexibility; I can do it just as much as is fun for me and that works into my regular writing schedule. And it’s also automatic promotion for me as an author; there’s always a big book signing attached to these workshops, so I’m selling books and building my readership, too. But now people pay ME to travel and promote myself instead of me shelling out for it, a very good deal.

I don’t need my teaching to pay the mortgage, but it pays for a lot more than I ever expected it to.

So the financial lesson here is – be alert for opportunities to turn what you are doing anyway and love to do into an income stream.  It doesn’t have to be teaching!  There are so many writing-related services that could turn into an income stream for you: designing book covers, formatting e books, social media assistance to the overbooked… the list is really endless.

The question is, what are you good at and how can you make it pay?

So, do you practice multiple income streams, in investing, saving, writing, or whatever? Or is this a new concept that might work for you financially? How ARE people making ends meet in this most definitely improving, but still precarious economy?

And most importantly – do you EXPECT to be paid for doing the things you love, if you are doing them well?  Or have you bought into the idea that artists must starve and struggle?

Alex

14 thoughts on “Writer financial survival 101: multiple income streams

  1. Vicki Pettersson

    I love you, Alex.

    That is all.

    Oh, wait! That isn't all. I just heard from a reader this a.m. – I recommended your e-book, Screenwriting for Writers, as she wasn't receiving favorable responses from agents. She ordered it, did the work, and now requests for partials and fulls are zooming in. She's waiting to hear from a top agent now. She said your book helped her see what her story – and talking about her story – was missing.

    Helps me every time, too, but I've already told you that. ๐Ÿ˜‰

    So, yeah, I think it is your calling and you should be compensated for doing the work you were meant to do. Best to you.

    Vic

  2. Alexandra Sokoloff

    Vicki, it's always so great to see you, even just in cyber. Great to hear about your reader – thank you, It's exactly that kind of feedback that makes me keep blogging and writing on story structure even though writing another book on it is being a massive amount of work on top of writing fiction. But I had teachers who unlocked the secrets of better storytelling for me, and if I can do that for other people, it's kind of not optional.

  3. Alaina

    I just graduated college. I don't have any money, right now; I can't invest in stocks! My only income stream– horrible as it is– comes from McDonalds.

    I know I'm not very good at teaching, at least as a job; I taught Trombone Lessons a few times in middle/high school, and I don't have the patience for it. I could do it again, though, if I needed the money. And I could probably do a workshop. (I imagine adults in a workshop will listen a lot better than a kid on too much sugar who'd rather be playing soccer.)

    Multiple income streams sounds smart, though. Thanks for the post!

  4. Alexandra Sokoloff

    But Alaina, you have something that is priceless: time. Time allows the magic of compound interest to do its magic, This is the best advice you are ever going to get, so please listen carefully and DO IT and you will be a millionaire right when you need it most. Take one dollar a day out of your salary and put it in savings. Save until you have thirty dollars (that's one month) and then open an e account with a deep discount brokerage company like BuyandHold.com or E Trade, where you can buy stocks in any amount just as easily as buying books on Amazon for a few dollars per trade. Right now I'd advise you just buy SPY, what they call Spiders, which tracks the S&P 500. That's basically being invested in the best companies of the Dow, a little in each company, for one price. You can set up your account to buy the same amount every week, or do it once a month, so you never have to think about it, and your investment will grow… and grow. Don't ever sell what you've bought, just keep investing.

    At your age, this kind of investment will multiply like you cannot imagine. You MUST do this. You will never have to worry about money if you can get in this habit NOW, and gradually build up to investing a little more, and a little more. This is what we should be teaching in high school instead of algebra.

    Read more here: http://davidgaines.com/realm/npng/082905compound.html

    http://www.thesimpledollar.com/2006/11/22/what-can-a-dollar-a-day-get-you-and-an-inspirational-idea/

  5. Lisa Alber

    You're the best, Alex! I love this. I'd love to hit one of your workshops someday.

    What I love about your teaching stream is that it rose organically. You were doing what you do, and over time it morphed into something bigger. Like Alaina, teaching probably isn't for me, which is unfortunate because there's a reason why teaching is the fallback job–there's always a need!

    I do think about income streams, but my issue is having the energy to pursue everything. As it is, for my technical writing day-job, I do have a few clients. Eventually, I'm hoping fiction will become an income stream too (sigh). That was always the goal.

  6. Alexandra Sokoloff

    Lisa, it's really true, you need to find things you like to do, that will energize you to go back into the writing instead of drain you. Oprah was always good about running programs that featured people who turned little side hobbies into lucrative businesses. People who tend to overshop on e Bay can turn around and sell at a profit. That kind of thing.

  7. Allison Davis

    Alex, great advice. Same is true for those of us who want to ween ourselves off of our day job and gain more time. I've been working on building little streams. I have a horrible habit, especially when work is stressful, to internet shop. Sometimes I don't even open the box, I just send it back. It's a terrible habit. So, during the heart of the recession, I bought pieces of stock, dividend stock mostly, instead. Like 5 shares. Of Apple. at $80. Stuff like that. Amazing the little nest egg that grew instead of the three pairs of shoes I didn't need etc.

    I have rent from my downstairs flat from a house I bought years ago (and thought I couldn't afford at the time) and I can make money in other ways. It's all true that if you put your mind to it (and start NOW) you can build up these streams. You don't have to have any money right this minute to start building these streams. Put away what you won't miss, (or instead of having that third beer….) $5 a week, whatever. Money is a tool, that's it.

    Hmmm, Australia in August?

  8. Shizuka

    Great post, Alex. I always know I'm going to enjoy your blogs,
    but I didn't know you were so financially savvy!

    I sort of have multiple income streams — 2 related types of work (interpreting and translating)
    and some investments.

    I want to add novel writing as an income stream, but I need to do a lot more before that happens.
    I think artists should definitely get paid for their work if others enjoy and use it.

    There is a flip side to turning creative work into a business.
    Sometimes it becomes not as much fun.
    I've made jewelry in the past, but I don't think I'd ever turn it in to a business.
    It's not fun to worry about the price of gold or how a ring design will work in a different size or how expensive it will be produce molds.

  9. Alexandra Sokoloff

    Allison, thanks for all the great practical examples of income streams. I think it was on The Motley Fool finance website that I read: "Buy stock instead of STUFF." Seriously great advice.

    I buy mostly dividend stock, too, a little at a time, and am a big fan of the "buy a duplex and rent out half" strategy.

  10. Alexandra Sokoloff

    Shizuka, you sound pretty financially savvy yourself! Good point that turning creative work into a business can just be extra stress. I sure wouldn't want to have to estimate the price of gold as part of my creative work!

  11. Allison Davis

    Shizuka, are you a certified interpreter? We use them all the time in my current case…

  12. KDJames

    Alex, your first Screenwriting Tricks was the first ebook I ever bought. Actually, that was the first drop in a stream of income going in the wrong direction (I'm now hopelessly addicted to ebooks).

    I know I've told you this before, but I am SO GRATEFUL for your teaching. The online class of yours I took, breaking down movies to examine structure, was the first time I finally understood structure. And I'd taken classes and read explanations from some pretty amazing teachers. But I just never quite "got it" until you came along and totally ruined movies for me. ๐Ÿ™‚ So thank you!

    If any of you ever have an opportunity to take a class from, Alex, don't even hesitate. Really.

  13. Shizuka

    Allison, I probably should get certified, but I haven't since I don't like court interpreting.
    Which is really strange since I was a lawyer for about 10 minutes (it didn't take).
    I did get a translation certification; the exam was kind of fun.

    It's tough when you handle cases with foreign languages.
    But the fact that you do means you must have some big cases…

  14. Alexandra Sokoloff

    KD, you're always so supportive, thank you! I know, there is an element of ruination to it – but the joy of seeing great craft in action always makes up for it for me.

    I just saw the absolutely mesmerizing Danny Boyle Frankenstein (both shows) and in between being gobsmacked by Benedict Cumberbatch's creature (how does he DO that???), I kept gasping aloud at the set design and perfect sequence and act climaxes. It was torturous not to have a class that I could yell things at. (Did you see that Midpoint??? What a scene transition!!!)

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