Irony 101: Freelance Income

[rolanni]

This may sound funny, but we had a really good year last year, income-wise. As a result, Steve and I are now brainstorming ideas to produce cash flow.

It isn't that we're not making some money -- or at least that we have made money -- but. . .royalty money comes in lumps we can't predict and at times we can predict only in broad strokes. This is the freelancer's problem -- the Federal Government wants everyone to have predictable lives that fit into predictable boxes for income tax and healthcare purposes.

This means, among other things, that no lucky writing year goes unpunished.

For example, we got a really nice royalty check in late December that meant we had to (after we finished dancing around the kitchen, because wooHOO, look at that check!):  1) spend $ thousands to “repay” the ACA for health coverage that would have been subsidized if the check had arrived a mere eight days later;  2) we had to pay a substantial penalty to the IRS for having guessed wrong as to the amount and timing of our total annual income (and thus the amount of our quarterly tax payments); and 3) we had to cancel our planned, and greatly anticipated, attendance at this year's worldcon.

This is the freelance reality: There's just there's no way for us to know the amount (if any) of royalties ahead of time.

A more even and more constant cash flow would help against these gotchas, especially at a time we're looking to move and get things settled down. In fact, it would have been really good if we could have managed to move last year.  Since that didn't work out, that evening of cash flow has become even more important since the $12,000 worth of repayments and penalties cuts down our available down payment options this year.

Now, we do have some Splinters that will be going up on Splinter Universe, as time permits (please watch for them!) but. . .I feel we're going to have to do better than that in the long run, something more long term and predictable.

Some folks we talk to have suggested that we set up a Patreon account (for those who don't know what Patreon is, here's Elizabeth Bear's page, and here's Ursula Vernon's and here's C.E. Murphy's -- as examples).

I'd like to know what people think of the Patreon idea, since Steve and I are of mixed minds.

I will note that some kind folks have put Splinter Universe on a weekly or monthly payment schedule, via PayPal, and by personal check, which is very much the same sort of support -- and which we appreciate very much.

So, really -- what do y'all think of the Patreon idea? Does anyone have any other ideas regarding how we should approach this (going back to college, getting my medical degree and discovering a cure for brain cancer is, I think, not going to be a viable plan, this far out)?

Thanks for listening.

Comments

Familiar problem

[charlie russel (from livejournal.com)]

This is an all too familiar problem. Which can get nicely compounded when currency fluctuations get stirred into the mix. (That one is my problem, but not yours. Yet.)

Ultimately, what I finally broke down and did was get a 1/2 time job I could do from home. That's stabilized things remarkably. (Deciding to opt to start receiving your Social Security now, rather than later, might also have an appreciable stabilizing effect. )

Lacking any consistent income, however, it was a constant battle between quarterly cheques and weekly expenses. What we did was figure a bottom line "nut" that we needed to get by on. (Not a budget, but a rock bottom minimum to survive and make the mortgage.) That we put away out of each royalty cheque, if we could. (Some quarters weren't so great.) Then, when we had a good quarter, we'd split the extra in half - 1/2 to the emergency fund, 1/2 to extras beyond that rock bottom minimum. And if we owed our minimum from an earlier quarter, that came out first, off the top.

Did it work? Well, sort of. It tended to work quite well when we'd had a run of good quarters. Less so when we'd had a dry run.

Re: Familiar problem

[rolanni.livejournal.com]

When we get a royalty check, we immediately take the tax money off the top. Then we feed the mortgage account (we like to stay at least 6 months up; sometimes we've been as much as 15 months up), then we feed the savings/emergency account.

That works. . .pretty well -- as you say, there are always hiccups. And it would still work pretty well now if we weren't simultaneously trying to sell our house/buy a new house. While we're expecting use the money from the sale for the downpayment on the new house, we still have to be liquid for things like closing costs and taxes and the ever-popular fees... And given the new! improved! quarterly taxes, staying liquid is. . .going to be a challenge.

[quotidian-c.livejournal.com]

I like Patreon: I get a lot of entertainment from free online writing and podcasts, and I am happy to be able to offer some appreciation for this. I view it more as supporting a series of small things rather than a person just because, so I currently support Patreons for a number of podcasts and a serial novel. For me, at least, a Patreon for Splinter Universe would be preferable to one for you personally. I am more likely to sign up for a regular small payment for Splinter Universe than to think of putting a one off payment in the pot.

I think you can ask for donations per month or per item - I prefer per month, as I know exactly what I'm signing up for. I wouldn't feel entitled to new stories or splinters on a regular schedule, but I guess I would (eventually!) cancel my donation if it seemed that Splinter Universe had gone dormant - say frequently more than a couple of months between new items.

I don't think rewards are necessary, but if you want to do them, be careful that you don't end up spending too much time or money on them. Collective rewards seem to work quite well, eg a story on a specific subject posted when donations reach $x per month or a minimum of one splinter per month when donations are at $y per month.

[quotidian-c.livejournal.com]

PS, forgot to say sympathies on the nightmare sounding freelance finance juggling. I'm horrified at how both the ACA payments and IRS fines are set up. As an employee, I have no idea whether freelancers here in the UK have similar problems.

[kalimeg.livejournal.com]

Do you suppose publishers could be talked into splitting royalties or moving payout dates? A December negotiation seems to be in order. Sure, it's great to get money -- but December 23 is pushing it toward a line that ends up costing you. Maybe something can be done -- for example, a standing agreement to pay you 1/4 of it once a week for 4 weeks if something pops up in the last half of December.

[mizkit.livejournal.com]

My Patreon conclusion is that it's probably a far better monthly system than weekly, for what it's worth. The microtransaction fees for a weekly chapter (which is what I've been aiming for) can get kind of outrageous when someone's donating $.10/chapter, even if it's collected all at once (which it is, monthly, so the fee is on $.40 or $.50, and can run to 15 or 20% of that tiny amount).

Patreon's user interface is still lacking, in my opinion. I must have emailed their support half a dozen times, and although they always responded quickly, some of the setup is just fucking stupid if you're working on a weekly by-project system. Monthly appears to be generally less stupid.

I'll probably run another Patreon project later this year, but I'll be switching to monthly and ideally posting a short story once a month for it.

Apparently one doesn't HAVE to post anything to collect a monthly donation, either, although I'm pretty sure the guilt would absolutely kill me if I didn't. :)

[bandicoot.livejournal.com]

My solution, unfortunately, probably won't apply to you. When I bought my house, I bought one with two attached rental units so that I would have some rental income. I've since converted one to my own use, expanding my part. The remaining rental is on the other side of a central carport, so I don't have anyone living in my back pocket. I've had extremely good tenants on the whole, several are still friends, and most lived here 5-10 years. However, rentals are not for everyone. It's a possibility that might be worth tucking in the back of your mind, though, just in case something of that nature happens to manifest in your search for the right homestead.

[rolanni.livejournal.com]

I don't really want to be a landlord.

That said, one of the houses that has been on the Possibles List since. . .forever, has an apartment in the basement, with a separate street level entrance. So...it could happen.

[ohlibn.livejournal.com]

Can you ask your senator in D.C. to intervene on your behalf? Because really, you're not intending to dodge your tax liability, and it wasn't your choice to get that large check at that particular moment. Maybe they could convince IRS to waive the penalties? Or there's also an ombudsman position at IRS itself to resolve issues.

[ironore.livejournal.com]

I'm a Patreon subscriber for an online comic strip I like. I like your writing better than I like the comic, so if you do it, I, for one, will sign up!