17 Jan Episode 194: #PutAPriceOnIt
Struggling to put a price on your time? Jess and Sarina (an economist and former trader on Wall Street) help your find that elusive number.
A listener asked Jess for advice on consulting fees, so in order to find an answer more satisfying than, “It depends,” Jess and Sarina get down to economic brass tacks. Sarina explains how publishers or anyone else who wants to hire you for your writing value your time, and how you can propose a figure that takes everything from opportunity costs to fungibles into account. In an attempt to make pricing your time less complicated and emotionally fraught, Jess offers a simple formula to nail down a number that represents your hourly worth.
Episode links and a transcript follow—but first, the #WritersTopFive that will be dropping into #AmWriting supporter inboxes on Monday, January 20, 2020 is ONE OF THE BEST YET: Top 5 Ways to Win at Newsletter Subject Lines. So sign up, support the podcast you love AND get weekly #WriterTopFives with actionable advice you can use for just $7 a month. (If you’re on KJ’s mailing list and have been impressed by her style lately—she read this early and took it to heart.)
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LINKS FROM THE PODCAST
#AmReading (Watching, Listening)
Sarina: The Lager Queen of Minnesota by J. Ryan Stradal
This episode was sponsored by Author Accelerator, the book coaching program that helps you get your work DONE. Visit https://www.authoraccelerator.com/amwritingfor details, special offers and Jennie Nash’s Inside-Outline template.
If you enjoyed this episode, we suggest you check out Marginally, a podcast about writing, work and friendship.
The image in our podcast illustration is by TK
Transcript (We use an AI service for transcription, and while we do clean it up a bit, some errors are the price of admission here. We hope it’s still helpful.)
KJ: 00:01 Hey writers, it’s KJ this week. Jess and Sarina recorded without me, but you’ll barely even have a chance to miss me because I’m both right here and back next week. While they recorded I was off to a hockey tournament in Ottawa, but it didn’t mean I wasn’t writing. You have heard me talk about Jennie Nash’s Inside Outline before and this was the tool that’s really pushed me through a tough novel writing spot and has me feeling like I’m able to move forward, even if the muse is not present and mine definitely doesn’t do Canada. Even if the hotel is depressing, and the weather is dreary, and I’m really not feeling it. Because I know where this book and I are going, I can still sit down and at least nudge us both in the direction of getting there. And if things change along the way, as they do, and have, and will, I can see where those changes fit in and what will happen when I make them. In fact, for this book (at least as it stands now) I’ve written about 17 outlines, which is a whole lot better than 17 books. So, if you’re feeling the least bit stuck on your project, try applying the inside outline to what you’ve already written and to the scenes to come. It just might be exactly what you need to get over the finish line. #AmWriting listeners have exclusive access to a free download that describes what the outline is, why it works, and how to do it. You can find it at authoraccelerator.com/amwriting. Is it recording?
Jess: 01:36 Now it’s recording. Go ahead.
KJ: 01:37 This is the part where I stare blankly at the microphone and try to remember what I was supposed to be doing.
Jess: 01:41 Alright, let’s start over.
KJ: 01:43 Awkward pause. I’m going to rustle some papers. Now one, two, three.
Jess: 01:54 Hey, I’m Jess Lahey and this is #AmWriting. The podcast about writing, about querying, about pitching, about what else? What else do we write here?
Sarina: 02:05 Finishing.
Jess: 02:06 Finishing things. That seems like such a long way off. Finishing things, but essentially really this is just the podcast about sitting down and getting the work done.
Sarina: 02:18 I’m Sarina Bowen and I’m the author of 30-odd romance novels and you can find more of my work at sarinabowen.com.
Jess: 02:25 And again, I’m Jess Lahey, I’m the author of the Gift of Failure and a forthcoming book, The Addiction Inoculation, Raising Healthy Kids in a Culture of Dependence coming out in spring of 2021 and a book I’m not ready to talk about, but I’m already researching for the year after that. And KJ you may have noticed is not here today. She’s at a hockey tournament. So it’s just Jess and Sarina today talking about a near and dear to Sarina’s heart in particular since she has the background in economics. And one that makes me want to throw up sometimes – about your value, getting paid, how much you get paid, how much you quote, how you ask people, how you value your time. It came up because in this month’s Poets and Writers is an article called Finance 101 for Writers. And part of that article included a worksheet for valuing your time and I took a picture of it and I texted it to you and I said, ‘This does not seem right to me.’
Sarina: 03:39 Yes and I had harsher words for it.
Jess: 03:42 Okay, so essentially what this worksheet (by the way, I will say that the new issue of Poets and Writers, I guess the November, December, 2019 has some fantastic articles in it) I’m not dissing the magazine, but I am dissing the worksheet, but let’s talk about it as a starting place. The worksheet itself asks you to figure out your expenses, and how much your life costs, and therefore how much your time is worth based on what your life costs, like what you would have to make per hour in order to justify spending an hour on something other than, I don’t know, your main job or writing an article that can get you paid or whatever the thing is. And what’s the problem with that?
Sarina: 04:26 Well, the problem is that somebody who lives in an inexpensive rural place is always going to, according to this worksheet anyway, price themselves down. And that’s because there’s a cost that the sheet is not picking up and it’s pretty much our entire discussion here, which is opportunity costs.
Jess: 04:44 What is an opportunity cost, Ms. Economy?
Sarina: 04:47 Well, it’s the term for exactly what it sounds like, which is what is the cost of what you’re not doing in order to do the thing you’re trying to price.
Jess: 04:56 Right, which is something I was thinking about yesterday as I was not editing my manuscript. Because if I hand in my edited manuscript, I will get the next installment of my payment from my advance, from my book. And instead I was cleaning up my Twitter stream, cleaning up my follows, and all that sort of stuff on Twitter.
Sarina: 05:18 So, opportunity cost of zero there, right?
Jess: 05:20 Exactly.
Sarina: 05:20 But also I have the benefit of having worked on Wall Street for 12 years. Where I was a trader of derivatives and everything there is really calculable. So it’s one of the only careers where you can see on a day to day basis how much money you’ve made for the firm. And how valuable you are. Now also, that number isn’t as measurable as it appears because some of that is franchise value. Like a monkey sitting in your chair could make a certain baseline amount and your real value is how much more than a monkey, you know. Anyway.
Jess: 05:55 So it’s sort of like monkey plus Sarina.
Sarina: 06:01 But the thing about that culture is that you’re always measurable at any moment and you’re not afraid to measure it. Like you can see on the page, Hey, I made $7 million trading this year, so my bonus should look like some fraction of $7 million. But of course that’s not how it works. The goal (somebody told me early on) was for management to pay you exactly the minimum that you’ll accept without walking out the door to go someplace else. And if you think about it, book advances are just the same. So if your publisher is saying yes to your book or they’re going to make an offer on your book, they’re going to run a P and L first. Like how big is a market for this book? How much do we think we could possibly make on it?
Jess: 06:50 Which is why that section in your proposal, if you’re writing, for example, as I do a nonfiction proposal, it’s really important to say, here are the books that are out there, here’s how my book stacks up, here’s why I’m the uniquely perfect person to write this book, and here’s how that will affect sales of this book.
Sarina: 07:06 Right. And if your agent is paying attention, she’ll help you pick comps that performed. Because if you pick loser titles, then that doesn’t work out.
Jess: 07:15 Actually, in my proposal, I had both winners and losers because I want to show how I’m different from one of those losers because they’re going to find it. It’s not like if I don’t tell them about it, they won’t know about it.
Sarina: 07:27 Right, yeah okay. So then it’s their job just like on wall street to pick a number. That 1- they think they won’t lose money. Like if we pay you $100,000 advance then are we going to lose our shirts, but also to pay you just $1 more than the next best bid.
Jess: 07:47 So in the conversation we’re having now, just to sort of guide you through this conversation, at first we’re talking about what your writing is worth for example, to a publisher. I also want to have a conversation about as a writer, how I decide, for example, what my speaking fee or my consulting fee because sometimes that comes up. If you write nonfiction, as I do, and you become an expert in something, people may come to you and say, ‘Hi, we would like to buy your time.’ And that seems to be the really wiggly part of this because I talked to my husband last night (he was recently asked to be a consultant for someone) and I said, ‘How did you value your time?’ And he said, ‘Well, I went to someone at the hospital and asked what the going rate was for a physician on this topic and they told me.’ And I said, ‘Well, here’s the thing, I’m going to have to come up with a number and I have nowhere to turn.’ And it seems really relative to me, not only relative based on myself, but based on who’s asking. So it’s not like with a publisher where I say for example, my publisher, Harper Collins, and I don’t have to worry about how much money they have. They have a pot of money to pay their authors. And I don’t question how much money Harper Collins has, but I do question, for example, if I’m going to pitch my services to a for profit company versus a nonprofit company, or a school versus a private individual who can fly me somewhere and it’s not going to make a huge dent, so that’s why I think for writers in particular, plus so many of us just feel so darn grateful that we get to write words and make any money for it, that suddenly all these weird value judgements, and shame, and undervaluing ourselves comes into it. Which is why I’m so jealous of the whole, here’s how much I made for the firm and here’s the very basic, the bottom level of what you can pay me without me walking out the door. Because that’s a big question mark for so many places and why it’s been such a relief to hand the negotiation for my speaking stuff over to an agent, who has some of that background information about what organization’s budget is before. So anyway, let’s talk about that a little bit.
Sarina: 10:04 So I have a response to a couple of those things. And one is that yes, I will cheerfully speak at a Romance Writers of America conference for 150 bucks or whatever because I know that they just don’t pay up for speakers and I’m going to get something else out of going there. The Goodwill of my fellow authors and maybe I’ll learn something as well. So there are those moments when you just put aside your time calculation, but because you’ve chosen to.
Jess: 10:36 Right. For example, I will be speaking next year at South by Southwest EDU and South by Southwest/South by Southwest EDU, they don’t pay. They just don’t, no one gets paid. I was their big marquee keynote and I did not get paid. They put me up for one night, but that’s sort of understood. There are certain places – you’re not going to get paid to do TED, you’re not going to get paid to do South by Southwest. There are just certain places that just do not pay. Hello, that’s just sort of part of it.
Sarina: 11:07 Right. And we make those choices anyway. And that’s why also if you’ve been asked to write a blog post for $100, you have to look at who’s asking, right? Like, Nancysblog.com. You know, maybe you won’t be able to say yes to that, but if it’s the New York Times or the Atlantic who’s asking, there might be other reasons why you would want to say yes.
Jess: 11:32 And it’s funny you say $150 because when I started writing at the New York Times that’s pretty much what I was getting paid. So you mentioned opportunity costs – could you give like a really just a description of what a definition for what opportunity costs are – just really quickly again.
Sarina: 11:50 Sure. Well, opportunity cost is the price that you could be making doing something else with that same amount of time.
Jess: 11:58 Does that take into account – for example, if I write for the New York Times, as a freelancer I am still expected to adhere to their journalistic ethics rules, which means that there are a lot of places I’m not allowed to speak as a speaker. It doesn’t matter actually, their theory is if you’re a full time writer there on staff versus a freelancer no one really knows the difference. Like the average reader is not going to know the difference. So I (as a total freelancer, with no benefits, no job security) I can’t take a speaking gig with let’s say for example Microsoft. Because the New York Times is probably going to write about Microsoft and there is this appearance of impropriety or that kind of thing. So, I then am undermining my future ability to earn in speaking.
Sarina: 12:57 So that all goes into your opportunity cost. And that’s a pretty unusual one. Like most writers who are listening to our podcast aren’t hemmed in like that.
Jess: 13:07 You would be surprised. You know, some places are a little more forward about it than others. But for example, like I said at the New York Times you have to sign something, the ethics stuff and you have to read this whole document that they resend out every once in a while just to remind you hello, just to remind you. And if you were to scratch deeper, I think a lot of places that should be doing that more with their freelancers, don’t. But you would be surprised.
Sarina: 13:38 Well, I did sign that thing once and I remember specifically that you are not allowed to be a travel writer who takes trips anywhere and still write anything for the New York Times. That wasn’t a problem for me.
Jess: 13:51 Part of the rule is also you really can’t take money from anyone who might possibly be the subject of a future New York Times story, which is everybody. I mean, really, I mean obviously there are a lot. So that was one of the major reasons that I gave up my column at the New York Times after three years is that it was so restrictive in terms of my ability to write.
Sarina: 14:15 Well that’s all opportunity costs. And the way that we come across our real opportunity costs is different for every writer. So I have five years worth of data on what I make when I write a novel. And I began to look at that in terms of what was my pay rate per word? Because before I was writing novels, I was doing some nonfiction for magazines.
Jess: 14:44 How can you know that immediately afterwards? Like that you would have to have a lot of accumulated data in order to do that.
Sarina: 14:49 Well, I do though. So I can look at books that I wrote in the past, and I can look at books that I wrote last year, and I can say what was my total take each time I managed to finish an 80,000 word novel? And what do I get paid? And I know roughly what it is.
Jess: 15:04 And you know how long it takes you to write X number of words. So you could come up with an hourly rate for your time.
Sarina: 15:10 Yes, or at least a daily rate. Like if I make 1200 day word count, I know roughly how much that’s worth going forward in my life. So if I took a day off to write 1200 words for somebody else, I know roughly what I’ve just handicapped myself. Or here’s where it gets interesting – if I accept my French publisher’s invitation to go to a reader convention in Lille (which I turned down this year) and it’s six days of my life, well that’s like a really expensive trip. Even if they pay for everything and I meet a lot of cool French people.
Jess: 15:46 This comes up a lot when I’m asked to speak, for example, in the middle East or Australia. One of the reasons that I have not gone to speak in Australia is that by the time they pay to get me there, we’re pretty much at my fee that they would also then have to pay on top of that. So it’s an extraordinarily expensive proposition.
Sarina: 16:05 I was actually offered a romance convention in Australia with travel paid and I’ve found that there was yet one more kind of opportunity cost, which is my family would be so deeply hurt if I went to Australia without them.
Jess: 16:19 Well, and then on top of that, is, you know, if I’m going to Australia, there’s not just the travel time, there’s the recovery time. Honestly, after I’ve been on the road for a while, there for a day or two my brain is dead anyway.
Sarina: 16:34 Right and you’re one of those rare people who can write on a plane.
Jess: 16:37 Not often, I’m just not good at it. As we have discussed in the past, I’m terrible about writing on the road.
Sarina: 16:43 So, I have an idea of what my days are worth. And sometimes when you’re developing like a second stream of income, which is obviously a wonderful thing to do if you’re a freelancer, right? So I have this sideline consulting business where I help other people publish their stuff. And sometimes, I have discovered by accident that my rate is too low. Because if I’m feeling kind of busy and I suddenly quote a more expensive rate and then the person doesn’t blink, then my understanding of what that consulting work is worth just notches up a little bit. So that’s useful.
Jess: 17:21 There’s also another interesting thing that happens is I was feeling pretty good about a rate that I secured for a talk and I went to my group of people (my other speakers who are about in the same position. They also had bestselling books. They also have about the same amount of experience speaking. You know, they’re sort of my wing people.) And I was feeling pretty good about the rate that I got. And then I found out that one of them got more. And now, no matter what, moving forward, I have this sort of chip on my shoulder about that event and I’m going to just chalk it up as experience to ask first.
Sarina: 18:05 On wall street we would’ve called that tuition. That’s the tuition you paid.
Jess: 18:10 Believe me, with speaking there had been a lot of tuition payments that I’ve paid over time.
Sarina: 18:16 Yeah. And sometimes the opportunity cost is really only emotional. Like if I open Facebook right now, I’ll probably see somebody announced that their romance novel is going to be a Netflix special in 2021. So, that’s like emotional tuition. You know, get off social media because 1 – it’s opportunity cost of your time and 2 – you will just feel bad if you look.
Jess: 18:37 So for example, time reading the comments, not good use of your time. As we try to be as concrete and as helpful as possible, I wanted to talk about a very particular scenario and I wanted to get your take on it. So let’s say that a person comes to me and says, ‘Hi, what should I charge as a consultant?’ This is a total hypothetical (although I get asked about fees all the time and it’s a really hard conversation for me because sometimes in consulting you can give an hourly rate or you could give a flat fee for a particular event or project.) Most of the time people are asking me about what should I ask for speaking. And so I’m going to do that one first. So if you’re new to speaking (and I had to actually email the person who is now my agent who was not my agent at the time) because I did not know even what to quote as a price for our first time keynote, I had no idea. And she said, toss $5,000 out there and see what happens. And at the time I’m like, ‘Oh, well that’s embarrassing. Am I worth that? I’ve never done this before.’ And I tossed 5,000 at them and they said, ‘Respectfully, you are totally worth that, but we can’t afford that. Here’s what we can afford and we’ll put you up.’ And it wasn’t $5,000, but it was fairly close and that was great. So I usually say to a first time speaker throw $5,000 out there and see what happens. I happen to know that even schools with small budgets can usually pull off $5,000, given certain parameters. Consulting is a little harder because given also who your audience is $5,000 for a talk I think is fair. Whether it’s a nonprofit, whether it’s a school, whether it’s a for profit. Obviously if it’s a super successful law firm, you can go higher than that. But for a first time keynote, $5,000 seems about right. But then you get into consulting and you get into situations where it’s an individual asking for your services. For example, in a situation I end up with a lot is people asking me if I will consult one-on-one with a family to talk about parenting stuff. The answer is no, I don’t do that. But I get asked a lot. Someone asked me about that recently. Another person asked me, ‘Well, what if the place is a nonprofit, a place that I would be very likely to donate money to?’ For example, I’ve worked for Vermont Public Radio, I’ve worked for the Albert Schweitzer Fellowship, a place I send money every single year. And it’s really hard for me to take money from a place like that because, I don’t know, I feel like it’s just money swapping places. Just feels really weird versus a corporation. So talk us through a little bit. Is there a way to figure out, from a consulting perspective, like what you should ask and how much do you figure in who the client would be?
Sarina: 21:50 Well, the concept you’re grappling with is the fungibility of money and time.
Jess: 21:55 And what does that mean?
Sarina: 21:56 That all of your money is fungible, usable in one spot as opposed to in another. So, humans have been demonstrated to be quite bad at something called mental accounting. Which is in our minds, we move money around in buckets and put little walls around it, when there really isn’t. And it’s actually quite necessary to one’s health. Because there are these days when I’m standing in the food co-op thinking, ‘Wow, the organic onions cost $3 a pound and the traditional onions are $1.50, can I afford the extra $1.50? And then I’ll go home and somebody will show me a BookBub that costs $957 and I’m like, ‘Yeah, take my money.’ So, you know, if I were to stand in the grocery store and ask myself how many books do I have to sell tomorrow to pay for the organic granola, like that is not a good place to be. You have to make some little walls and buckets to move your life around without a lot of undue anxiety.
Jess: 23:00 Well, and it helps if you don’t want to actually do the thing that you’re being asked about because then you can quote high without the concern that you’ll upset them or that they’ll say no and never want to work with you again. But, what if it’s someone that you really do wanna work with and you’re afraid (as so many writers I talk to are afraid of offending or getting the feedback that, ‘Well, oh my gosh, no, we couldn’t even possibly.’)
Sarina: 23:28 Well, first of all, this is going to happen at some point and you’re just going to have to survive it. But when you said that first time speaker fee and you were told to throw out $5,000. I could hear how stressful that is. Because what if that’s your one big shot and what if you just blew it because you said 5,000 instead of three? So it’s all in the wording, right? We all know that when people speak to us or ask us for things that there’s a way to put anything that is palatable…
Jess: 23:58 I used to do it in my proposals for speaking engagements. I would say this is my fee, but I am a teacher and I understand school budgets, and so if you can’t afford that fee, let’s talk. That was my sort of my way of giving them that, ‘Yeah, yeah, but pat on the back, don’t worry, we can still have a conversation.’
Sarina: 24:16 Right. So ‘let’s talk’ is better language than ‘or best offer’. Like when you see things on the list serve and it says asking $412 or best offer and you’re thinking, ‘Oh honey,’ you know somebody’s going to come in and try to get that for half that price. So yeah, so let’s talk is really powerful. Like I might need to jot that down…
Jess: 24:37 I wanted to add also that it doesn’t get easier (for me anyway). I mean, I have more information now than I used to in terms of who can afford what, but that’s a matter of experience and time. I worked for amazon.com as a consultant on the Stinky and Dirty Show and we arrived at a fee for services, which over two seasons. You know, that first season, everything took me forever, and reading scripts was hard, and I couldn’t visualize anything, and I wrote a ton of notes on everything, and I probably only made minimum wage that year. Whereas season two, I was much better at it and I did much better. So in my brain, I kind of averaged the two. Exactly, the first season was tuition. And that negotiation worked pretty well because they were skilled negotiators, which actually helped me a little bit because I didn’t feel so embarrassed doing the negotiation because it was part of the process. But when I’m talking to a single person, especially in a nonprofit, and they’re less skilled in their negotiation and I always feel a little apologetic.
Sarina: 25:48 Well, sure. So I get asks to go and speak at, for example, RWA functions all the time, like Saratoga Springs, Providence, Rhode Island. And these are places that if you look at a map, I’m reasonably close to, except the roads don’t go from here to there. And I always turn these down, because they’re on the weekends, during the school year. And it’ll take me four hours to drive there and I won’t enjoy it. And I just know going into that, that you have to listen to your gut. You know when it’s not going to work out, almost from the first moment. So, if you say yes to things or low ball yourself, then you know how that’s gonna turn out. And after you do it a couple of times, cause we all do…
Jess: 26:38 Yeah, it was a little easier for me. As I said, my husband who is physician, was asked to consult on something and I knew the price that he had quoted as sort of a professional fee that’s accepted in the industry. And then I was able to say, ‘Okay, well wait a second, I have a bestselling book, I have been researching this topic for 15 years now. Okay, I think it’s fair for me to ask the same amount.’ But also, without having sort of evidence of someone else’s ask, would have been a really hard thing to do. The numbers that I tend to see out there in terms of professional, they’re such a huge range. If you go online and you Google things like what should a consulting fee be, there are some websites that will give you, for HR it would be this, for marketing it would be this, so you can get kind of an idea. For writers, because what we’re talking about is banking on our expertise that we’ve earned through lots and lots of research and experience, that can be a little bit more difficult to quantify. But, I feel like as writers, if we want to be dealt with as professionals, then we need to view ourselves as professionals, and we need to quote a number commensurate with the experience that professionals might have. And I will say one other thing, I also do pro-bono work and I love the organizations. I choose the organizations that I choose to do pro-bono work with very, very carefully because (and I’m going to say this is going to sound horrible) but in my experience, if I do something pro-bono, I am valued less. I usually get lower turnout, it’s usually more work on my part because there isn’t anything invested in the other side in making sure that it turns out great because it was free. It’s free, so if it doesn’t go great, we don’t get great turnout, then it was a wash. Whereas I’m sort of expecting that people will say, ‘Oh, this is free and your normal rate is whatever, thank you so much.’ But that’s not what happens. What happens is that I actually do better if I ask for a token amount as sort of an honorarium, because there’s some investment in the other party’s side. But I can tell you right now that when I undervalue myself, I am valued less by the person who is hiring me.
Sarina: 28:58 Well then we need to talk about book advances for a minute. Because this is a lot of the same stuff. So an advance, as you know, is money you receive up front and then as the book starts to sell and royalties come in, you know, it’s clocked down until finally you hopefully earn out and then start receiving royalties on top of it. And there is widespread confusion on the part of even successful authors about what this all means.
Jess: 29:27 Basically my royalty statements are so confusing. I don’t get royalties yet, I have not earned out my advance for the Gift of Failure. But, as you point out, there’s two different, earn out my advance.
Sarina: 29:40 So hang on a second, because earning out is really only material to you. It’s not material to them. So the royalty rates quoted in all of our contracts are fairly standard. And that means for each copy of a print book you sell, you are earning between 7% and 10% of the cover price. And sometimes we can have escalators, which it’s fun to say this with a New York accent. I have an escalator, which means that after the first X thousand books, you get a slightly higher royalty rate. But let’s just say pretty much 90% of the book contracts in the world are paying between 7 and 12% of the cover price, depending on whether it’s a paperback or a hardcover or whatever.
Jess: 30:29 What if it’s on sale? And it’s not getting the cover price?
Sarina: 30:33 But it’s the cover price, okay? So e-Books though, in that same contract, I swear to God, will say 25% of net proceeds, which does matter about being on sale. So that means your publisher is going to ship the books. It has a $30 cover price (just because that’s a nice round number) and if you’re getting 10% on those, that’s like every time they send one out and it doesn’t come back, you get three bucks. But with your e-Books, they’re literally gonna look at the receipts that came in from Apple, and Amazon, and Kobo, and Barnes and Nobles’ Nook and pay you the 25% of net receipts on that. So if they put the book on sale for $1.99 for a couple of weeks, then the amount of money that you earn in royalties (or counted against your advance) is 25% of 70% of $1.99. So, all of this ends up on your royalty statement, but those numbers do not reflect how happy or sad the publisher is.
Sarina: 31:37 Because they are doing a profit and loss equation in the background that you’re not privy to, you never get to see it. Whereby they will be happy even if you never ‘earn out’ and start earning royalties because that is not the rate.
Jess: 31:54 So for example, I have not technically earned out the amount that I got for the Gift of Failure (which I had mentioned the number in an earlier podcast) but that can be okay. Because they can still be in the black for me, even before I get to the amount that I got as an advance for the Gift of Failure.
Sarina: 32:19 That’s right. And if you need a concrete example of why that might be. Just think about your marginal e-book rate sale, like right this second as we sit here in the library talking about this, somebody is buying your e-book. And if it’s 10 bucks, because I don’t really know. Okay, but it’s usually $10 and of that 10 bucks, your publisher gets about $7 and it didn’t cost them anything today to sell that and they’re only going to credit you with 25% of seven bucks. But that’s okay because they’re pretty happy to have the balance.
Jess: 33:08 As we’ve mentioned in earlier episodes of the podcast, I had to go out with a full proposal for this book that I am editing right now because we were worried that it’s a tough topic, blah, blah, blah, blah, blah. And I had said to my husband, ‘I bet you I don’t get as much for this book that I did for Gift of Failure because there was buzz and it was a viral thing and blah, blah, blah.’ And I got the exact same amount. So that can be a pretty good indicator to me that my publisher is happy with me.
Sarina: 33:36 Of course. And also is a good indicator for the whole wide world that earning out doesn’t mean anything in terms of publisher happiness. So, remember that though it’s sometimes hard to be paid a ton for something. And this is probably true for speaking engagements, too. Like if you hit the jackpot or get paid a whole slug of money for a book and then it doesn’t super perform, then you’re kind of in the hole with that publisher. And if you want to publish again, you might need to…
Jess: 34:09 Now when she says in the hole, this is a question I get all the time, no, you do not have to pay that money back. But from a publisher karma perspective, you’re a little in the hole.
Sarina: 34:20 Like if there’s a frothy, frothy auction for your book, because that was the flavor of the week, you know, and this happens and that’s like both an enviable and a tricky spot to be.
Jess: 34:34 That was, and believe me, the source of much anxiety. Because if I tanked, then I don’t get to write another book probably.
Sarina: 34:43 Right. Well this has happened to me.
Jess: 34:47 I wasn’t going to say it.
Sarina: 34:49 Well, that’s okay. My publisher basically said in 2012 or 13, like you’re dead to me. And that same publisher offered me a three book deal a few years later, but under a different name.
Jess: 35:01 Alright. So we have covered how much you’re worth to a publisher. We’ve covered ask $5,000 for your first keynote. Consulting – let’s say you are an expert – so I think a safe number to throw out as a consulting fee if you’re going to be an expert in education for a company that has a budget, I’d say $500 an hour is a high end, but still acceptable number that won’t make people vomit.
Sarina: 35:44 So lawyer money…
Jess: 35:45 Lawyer money. Well, because remember how I just said these are the professional numbers. If you look at what money lawyers get per hour and you look at what physicians get per hour. Now the reason I say that is this, I want to point out really quickly, I know we’re running out of time, but I want to point out really quickly that when I looked up, how you calculate how much your time is worth as a contractor. The calculus is this. Look at how much you make you make per year. What is your income per year? And then divide it out. Divide it by 50 weeks per year, accounting for those two weeks of vacation, divide it out by 40 hours per week. And there’s your basic number of what you’re worth per hour, based on how much you make, which we already talked about as a flawed calculus. But still it’s a good starting place to know sort of what an hour might be worth to you. And then according to organizations that sort of this is what they do – valuing consultants, they say now triple it. Because tripling it is an important thing to do because you’re not being paid benefits, there’s, there’s no risk being taken on by your employer. And as we just mentioned, as with the New York Times, for me, there are costs to me of taking that. So freelancers take on a lot of risk without a lot of benefit. You may have to pay for your own healthcare, you may have to pay for your own retirement. All these things, which is true, for me. And that costs a lot of money that they’re not having to pay. Now, the reason that multiplying by three may not phase someone who’s looking to hire you is they know they don’t have to pay your benefits. They don’t have to pay for your retirement, your pension, whatever. So, valuing yourself at three times what your hourly rate might be makes sense. So I’m tossing between $250 and $300 out there for experts in science, or education, or parenting, or whatever that thing is that maybe you’ve been recognized as ‘an expert’, which fraught term, but whatever.
Sarina: 37:53 I’m considered an expert in parenting. I’m considered an expert in education and therefore here is my professional rate as an expert in that field. There you go. Do we want to talk about what we’ve read? We didn’t even discuss if we’re going to talk about that, we had so much money stuff to talk.
Sarina: 38:10 I’m reading The Lager Queen of Minnesota.
Jess: 38:12 Oh, how is that? The one with the bottle cap on the cover.
Sarina: 38:14 I’m really enjoying it. It’s a third person narrative. And it’s a really interesting third person voice and I can’t wait to tell you how I liked it when I’m done.
Jess: 38:22 I’ve been listening to Masterclasses, still. And I listened to part of an economics master class with my younger son who’s interested in sort of wanting to be able to get up to speed to have conversations with his economists major older brother. That’s been interesting. Also, I’m learning how to do makeup with the Bobby Brown.
Sarina: 38:46 I’m watching that, too.
Jess: 38:47 I’m so bad at doing my own makeup. In fact when I first started speaking, I think I had been married for at least a decade at that point. And I still had the eye shadow that I wore the day I got married, which is an indicator of how rarely I wear makeup. So there is actually a very helpful a makeup tutorial with Bobby Brown. So anyway, I’ve been listening to those. I’ve also been starting to learn Spanish. I spoke about that during our goals episode and I am happy to point out that now I have switched from having anxiety dreams about not graduating from law school to a dream I had last night about the fact that I had a Spanish exam coming up and that I had never, ever studied for it. I just finally read The Collected Schizophrenias by Esmé Weijun Wang. The Collected Schizophrenias is a collection of essays KJ insisted I read it and I love it. I tend to love essay collections anyway, but this one is by Esmé Weijun Wang. And not only is the book fantastic, her Twitter feed is really, really good, too. So you should check her out. It’s a remarkable book, I’m really absolutely loving it. And it is about schizophrenia, mental illness, personal experience with that it’s been a fascinating read.
Sarina: 40:40 And until we see you again, KJ, and for the rest of you, keep your butts in the chair and your head in the game.
Jess: 40:57 This episode of #AmWriting with Jess and KJ was produced by Andrew Parilla. Our music, aptly titled unemployed Monday was written and performed by Max Cohen. Andrew and Max were paid for their services because everyone, even creatives should be paid.