I am in no way a financial expert, and though I have managed to get out of debt and stay out of debt, I ended up getting back into a corner where I had to make some difficult decisions this year. Long story short, we are now renters. I am a lot happier. A couple of people gave me so much grief when we decided to sell our house because “renting is throwing money away”, but it was the best decision I made this year. I truly believe that all of that financial stress only added to my burnout with writing. It’s hard to be creative when you feel like you can’t breathe.

So anyway, before we sold the house, I did look around at some jobs in the area. While I was writing my resume and going to interviews, I quickly realized that, despite how burned out I was, I most wanted to keep writing books. And not only did I want to keep writing books, but I wanted to keep writing books that I am passionate about writing.

All of that rambling above led me to the core of this post.

If you are an author who writes for passion and wants to keep writing for passion, then the best chances to do that is to look at finances from the perceptive of growing your money. I have come to the conclusion that it’s not enough to write more books and to promote those books. I mean, at any time you can have a drop in sales. That reason will vary depending on your circumstance. Perhaps you end up being a caretaker. Perhaps you have a health issue. Perhaps you have to move. Perhaps you have a baby. Perhaps you end up in burnout. There are many reasons why you are unable to keep up the momentum for writing, publishing, and marketing that once came easily to you.

After spending half the year researching how to best manage money, I have come to the conclusion that an author who wants to have the best chances of writing for passion without worrying so much about sales is to invest their money to make it grow. If you can take the money you have and make it grow, then you’ll help buffer yourself from a drop in income that might come in the future. Obviously, you also cover the basics: live on less than you make, cut back your spending, eat at home (instead of eating out), etc, etc. But there are two main ways to grow your money that have been brought up more than anything else in my research: find a way to earn more money (by doing stuff like learning a new skill, getting a raise, or getting a new job) and invest in appreciating assets (could be stuff like the real estate or the stock market).

That sums up a good six months of my life in research.

In my case, I have decided to learn a new skill and invest in the stock market. If you’re going to look into a skill, then it might as well coincide with something you have an interest in. I decided to take a six-month course on learning how to be a personal assistant to authors. That way, I can get paid to help other authors with stuff they need. As an author myself, I already have some familiarity with what to do, but the course added things I didn’t know about, and I felt that if I wanted to be good at this, I should have a firm foundation. There’s nothing worse than hiring an assistant only to find out you have to train that person. I just finished this course through Grounded Chaos.I highly recommend these two ladies because they were supportive and answered every question I had. If you want me to, I can tell you where to find them. Anyway, in the next couple of months, I will be an author assistant, and I am hoping to earn some extra money that I can invest.

As a disclaimer, I am now 50. My husband is going to be 52 next month. We did not start investing back in our 20s or early 30s like all the smart investors do. I can’t tell you how many times I have been hit over the head with, “You should start investing in your early 20s and 30s” in my research. I am aware I lost the magic of “compound interest” because I don’t have the amount of time that a 20 or 30-year-old does. Believe me, I wish I had been smarter, but I wasn’t. But it doesn’t help to focus on things you can’t change. I can’t go back in time. If you’re in a similar situation I am, you can’t go back into the past and change things, either. So my advice is to focus on what you can do now. Doing something now is better than giving up.

What I have learned is that keeping money in a savings account in the bank will not keep up with the rate of inflation. That means you will end up losing money in the long run. Now, while saving money will not build up wealth, it’s still a good idea to have an emergency fund. Some recommend a full year, but I didn’t have much money after the sale of the house, so I opted for three months. The general rule of thumb is three to six months. I guess it depends on your risk tolerance and whether or not you have someone to help you financially. Since my husband is the primary breadwinner, I can afford to do three months.

I am willing to take on some risk but not a whole lot. I’ve never been a high-risk person. I think when it comes to money, you do have to do what is comfortable enough for you. A little unease is probably okay, but you don’t want to be lying awake at night worrying about it. If you are worried about stuff, you will have a hard time writing.

So now let’s talk investing…

After all of my research, I learned that if a job offers a 401K, you’re better off taking it. If the job will add a percentage to the money you put in, it’s even better. As authors, we don’t have 401Ks, but for those that have spouses who do have a job that comes with a 401K, this is something to consider. Because you and your spouse pretty much share the pot of money. So their 401K is yours, too. So this year, my husband and I finally got the 401K transferred from his last job to this new one, so we can start the price matching. We only have $7400 in it. That is very little for what it should be, and it’s a little embarrassing to tell others that since we are in our early 50s, but I share it because if this is like you, you know that you’re not alone. And $7400 is better than $0. It’s all about how you’re going to look at things. I choose to look at this in a positive light. At least we’re making progress. Progress is better than not doing anything.

The second thing to invest in is the Roth IRA. Now, I did set this up for me and my husband this year. That’s right. We just opened our IRAs. Again, it’s progress. It’s better than waiting until next year to open it. The nice thing about the Roth IRA is that you don’t pay taxes on it as long as you wait until you’re 59 1/2 to start pulling money out of it. There are a couple of other things about the Roth IRA where you can avoid paying taxes if you pull money out sooner than when you reach 59 1/2, but for the sake of this post, I’m just sticking to the age factor. (Before you start taking money out of your Roth IRA, look up the rules.)

Since there is something that kept popping up in the Roth IRA videos I came across, I will mention it here. When you open a Roth IRA, you need to put the cash into some kind of investment. Otherwise, you don’t earn anything. The money just sits there. There are a lot of things you can invest in out there. I chose the S&P 500 because it has a history of earning a return rate of 10% overall. Decades ago, my poor dad spent an hour trying to explain to me what the S&P 500 was. (I remember him saying it was a solid investment.) Anyway, since my mind does not easily grasp this stuff the way his mind did, it all went over my head. But then a woman in a five-minute You Tube video said, “The S&P 500 is composed of the top performing 500 companies in the US.” The lightbulb finally came on. I ramble about all of this to say that if this information doesn’t click right away, maybe listen to someone else. The way someone presents the information can make all the difference. I’m still learning the difference between index funds, ETFs, and other language commonly used words in the finance world. I take it a little at a time. My brain is not wired to think this way. My brain is wired to come up with fictional stories where the creativity knows no bounds. I can see storylines in the strangest places, but this stuff where things are concrete are not as easy for me to grasp. So if you’re overwhelmed and want to learn about this stuff, I recommend taking it in small doses.

The third thing I did was open a regular investment account. It’s not impressive yet. I contribute $25 a week to it. The people I researched recommended setting up automatic transfers from the bank to the investment account. That way you don’t have to think about it.

Really quick, in case someone doesn’t know (because I didn’t), I’m going to insert this piece of information into this post. In order to invest, you have to go through a brokerage. Think of a brokerage like Draft2Digital (D2D). You put your book into D2D and then pick a retailer to put the book on. Common brokerages are Charles Schwab, Fidelity, and Vanguard. There are other brokerages, but I just mentioned a couple for the sake of simplicity. In those brokerages, you take the cash and pick something to invest the money in. That is where I go to select the S&P 500. I am dabbling a little bit into a smaller stock and a mutual fund (can’t remember it off the top of my head but investors who are more conservative side recommend it), but the majority of my money is in the S&P 500.

Now, I will address something about how the stock market is not seen as a secure way to grow money. Home ownership is seen as the better choice, which is why I was strongly warned from a couple of people to keep the house (even though it was sucking the financial life out of me). One of the benefits of home ownership is that it can work as a forced savings. I see the 401K, the Roth IRA, and the regular investment account as a similar thing. There is no guarantee the stock market will go up. Yes, it can go down. Historically, however, in the lifetime of the stock market, it has been going up overall. There is a fallacy in believing that homes always go up in value. I have owned two houses over the years that went down in value after I purchased them. I have lived in one where the price went up, and I lived in another where it was pretty much the same. Home ownership is not a guaranteed return on investment, especially after you factor in all the following: 1. the money spent in the interest off the mortgage that goes to the bank, 2. the insurance that can go up each year, 3. the property taxes that can also go up each year, and 4. the repairs that will inevitably come up. Maybe the house itself will go up, but that doesn’t mean you actually “made” money after you factor in your expenses.

Suffice it to say that when it comes to money, there are no guarantees in life, but I have decided that if the stock market completely tanks, then I’m probably going to be more worried about finding food at the grocery store than my investment portfolio.

I could go on about all of this. Surprisingly, this is a topic I’m enjoying more than I thought I would. But I want to get back to the whole writing thing.

If you can build up money with investments, that money can help buffer you from anything that happens with your writing income. That offers some peace of mind. If you’re willing to sacrifice some small luxuries today in order to invest more, then that peace of mind is even better. For example, I am no longer eating out. (And I loved eating out, so this was a big deal for me.) That has enabled us to not go into credit card debt to buy groceries. Also, I now shop at Trader Joe’s. If anyone is disgusted with the price of groceries and would like an option that gives you good quality food for about half the price overall, I recommend Trader Joe’s. I can get away with two carts’ worth of stuff for my family for what amounts to only one cart at the regular grocery stores in the area. Also, I recommend Sam’s Club or Costco for gas and your non-food items. Buying in bulk is worth it. If you’re willing to make sacrifices, then you can add more to these investments. I am hoping to fully fund the two Roth IRAs next year by making these sacrifices.

I don’t know what would best help you in your situation. My hope is that maybe something in this post will help you if you’re struggling like I am. If you have any thoughts that can also help authors build a strong financial foundation that can help them achieve their dream of being financially free enough to keep writing stuff they love.