The Difference Between Making Money and Receiving Money

Many aspiring writers focus on earning potential but often neglect the practicalities of handling money. It is crucial to differentiate between “making money” and “receiving money” for a sustainable writing career.

• Making Money: Represents the potential income a writer is entitled to, such as agreed contracts, platform-predicted royalties, or estimated profit earnings.
• Receiving Money: Involves the actual transfer of funds into a writer's bank account. This means that until the money is in hand, it remains a prediction and is not guaranteed.

The Reality of Cash Flow

Freelance writers, unlike employed writers, do not receive regular paychecks. They face a period of no cash flow as they build their client base and complete their first projects.

• Many writers experience weeks, if not months, without receiving any income while actively working.
• It is essential for aspiring writers to understand the importance of consistent income to cover essential expenses, especially during those early stages.

Make Money Before You Make Money

A vital question for aspiring writers is, "How will I afford my life and business when I am not receiving money?"

• It is crucial to have savings in place to cover living expenses, writing business costs, and unexpected events, such as sick leave or technology failures.
• These expenses include essential bills, marketing tools, customer relationship management software, technology updates, and essential personal needs.
• Building a safety net before embarking on a freelance writing career can significantly reduce stress and financial burdens.

The Unpredictable Nature of Earnings

As a freelance writer, the timing of receiving payments is often unpredictable due to clients' payment terms and the fluctuating nature of writing income.

• Clients may have varying payment terms, leading to inconsistent payment schedules. Even when clients are on time, unpredictable factors can affect payment dates.
• Earning potential can vary greatly depending on the type of writing, client base, and platform performance, resulting in irregular income.
• Payment clearing processes, such as those used by PayPal or other third-party payment services, further add to the unpredictability of cash flow.

The Importance of a Business Mindset

Writing is not just a creative endeavor but also a business. Understanding the business aspects of writing is crucial for success, and aspiring writers should invest in learning about finance, marketing, and managing a writing business.

• Many writing courses neglect essential business topics like accounting and marketing.
• Writers must develop a business mindset, which involves understanding cash flow, managing finances, and developing marketing strategies.
• A strong foundation in business knowledge will empower writers to make informed decisions and build a thriving writing career.