Personal Finance Musing 17- Your Book: The Perennial cash Flow Generator

PERSONAL FINANCE MUSING 17

YOUR BOOK- THE PERENNIAL CASH FLOW GENERATOR

I will once again begin this post with my impassioned plea - please keep sharing these posts with your near and dear ones for these are a run up to my book, “Musings of a (financially) illiterate father, going to be in your hands in the first week of August. The book has been specially written to teach the alchemy of wealth creation and retention to our children. They deserve to learn it.

We had begun the conversation on the process of book publishing last week and had established two things- ballpark figures of Rs 26,000-78,000 of expenditure (which may be borne by the publisher, if he finds your book commercially viable) and 6 months to an year of time (after finishing writing the book, which may itself take a year or two). Clearly, the investment required to write a book, both financial and intellectual, is substantial and hence, one can do with some additional motivation to write. This is what this post is all about. You can read the post, if not done so far, through the link below.

https://andysfinancial.blogspot.com/2018/06/musing-16-publishing-process-graveyard.html

One of the biggest constraints of middle class, salaried persons is that they have a single source of income- their only cash flow generator. And why is that? Because they are trading their time for money to generate this cash flow (they do typical 9 to 5 jobs and get paid at the end of the month). Since the time is finite, only 24 hours in a day, so is the income of a typical middle-class person. The trick lies in somehow increasing the cash flow while working for the same (or lesser) amount of time.

One way of doing it is to keep building your assets while keeping the liabilities to a minimum. These assets will then keep generating cash flow for you- day and night, whether you work or no. I have briefly touched upon this point in one of my previous musing (link provided below), but yes, a detailed deliberation is long pending. I promise to do so shortly either in form of my book (one full chapter is devoted to it) or in one of the subsequent posts- whichever you read first.

https://andysfinancial.blogspot.com/2018/05/personal-finance-musing-12-understand.html

Your book is your potential and perennial cash flow generator- by way of royalties. Once your book gets published and starts to sell, the publisher will pay you royalty which is a percentage of the book price (MRP or net price). As per my experience, the royalties offered to a first-time author are in the range of 5-15%. So, if the MRP of your book is Rs 500, for each book sold you will be paid Rs 25-75, by the publisher. Invariably, if the publisher is bearing the costs of publishing, he will not offer you any royalty for sale of initial few books- maybe 500-1000 or so. However, if you have borne the initial costs, the royalty kicks in with the sale of the first book itself.

Another methodology adopted by the publishers is not to ask you to bear the initial costs but instead ask you to “buy back” few books. Taking the same example, if the MRP of the book is Rs 500 and the publisher asks you “buy back” of 200 books, you end up paying Rs 1 lac upfront. The responsibility to sell these books will then be yours.

What I am getting at is that it is extremely difficult to get your book (at least the first one) published without investing considerable time, effort and money. Fortunately, there are alternatives available to this painful process in the form of “self-publishing”.

As the name suggests, self-publishing allows the author to publish his/her own book, without going through the conventional publishers. In the traditional publishing model, the control of the publication of the book is shared between the author and the publisher. In, self-publishing, however, the author controls the entire process including the design of the cover and the interior, pricing, distribution, marketing, and public relations[1]. There is a number of reputed self-publishing platforms in India like Notion Press, Partridge, Pothi, White Falcon, 24 by 7 (these are the ones I explored) etc. Technically, one can publish his/her book on these platforms without any cost.

All of the abovementioned platforms also provide "on payment" professional services like editing, cover designing and so on. In addition, they also offer packages wherein all the steps/activities preceding the book publishing and post publishing e.g. book launch and media handling is taken care of. One can thus pick and choose based on one's budget and canvas of the book.

There are few issues one must consider before deciding on self-publishing. Firstly, the book may lack the gravitas of a conventionally published book due to lack of quality assurance. This may make the readers less interested. Secondly, the author is solely responsible for the book advertisement and sale. Most established publishers take care of these issues by virtue of their networks and connections. However, if one is convinced of the worth of the book and utilizes professional services (editing etc.), there is no reason that the book will not sell. All of us have a fair number of social contacts who can be utilized to advertise the book far and wide. The Biggest advantage of, self-publishing, however, is the additional royalty that you get- you don't have to share it with the publisher. Imagine getting Rs 200 royalty on the sale of each book instead of Rs 50.

It is always a good idea to have the book converted to e-book also and make it available on platforms like Kindle, Kobo and Google books. Most books today are read on these devices.

If you are still unconvinced about the efficacy of self-publishing, let me put it to rest. We all have read John Grisham and Tom Clancy- both began their writing careers as self-published authors[2]. Iconic books like, “Rich Dad Poor Dad” by Robert Kiyosaki, “Your Erroneous Zones” by Dr. Wayne Dyer (more than 35 million copies sold), and “50 Shades of Grey” by E. L. James are few more examples[3]. Closer home, household names like Ashwin Sanghi (The Rozabal Line) and Amish Tripathi (The Immortals of Meluha) began their careers as self-published authors. “According to Sanghi, he sent over 100 requests to literary agents and publishers for his first book, only to get rejected by them all. Unwilling to give up on his dream, he decided to go the self-publishing route[4].” 

I now revert to my original point- that of investing in assets which generate perennial cash flow for you, without you working for it. A well written, published and the advertised book will keep generating cash flow for you in form of royalties. Who knows, if some Film/TV producer takes a liking for the book, it may become your "3 Idiots", boosting your income manifold. I hope I have convinced you to express yourself. Remember the title of my last post, “The Graveyard is Full of Brilliant Ideas”.

Signing off for today; looking forward to your support in the final steps towards this crucial journey of publishing my book. Please make this book available to as many youngsters as possible to improve their financial futures. They deserve the best, and we owe it to them.

Due to some last minute issues, my book launch will be delayed by a few weeks and hence the book will be in your hands on 07 Aug 2018 now. Thank God that I can now give you a firm date. I can only promise that this additional wait will be worth its while.

I had sent my book draft to many prominent personalities for their comments. I am happy to inform that the book has received very positive reviews which I shall start sharing with you starting next week.

For now, enjoy your Sunday. You have earned it. But, also pick up the pen and write- begin with a letter to your parents/ boy or girlfriend/ spouse. Do express yourself.

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[1] Wikipedia. Accessed on 24 May 2018.

[2] http://www.selfpublishinghalloffame.com/. Accessed on 24 May 2018.

[3] https://curiosityneverkilledthewriter.com/10-bestsellers-that-began-as-self-published-books-1c288784ba21. Accessed on 24 May 2018.

[4] https://notionpress.com/blog/famous-authors-who-chose-self-publishing/. Accessed on 24 May 2018.