Would you rather have a pile of money or an endless stream of cash flow? Interestingly enough, most people will say the pile of money. The reason, they say, is that you can also just buy a stream of cash flow.
In reality it’s not that easy to convert cash into cash flow. It’s even harder to convert your time into a stream of sustainable cash flow. “Sustainable” in this case means that the money keeps flowing in, year after year.
Most of my clients are trying to find ways to create passive cash flow. They have good jobs and/or successful businesses, but if they don’t show up, they don’t get paid. They want income streams without needing to actually work every minute.
That’s the power of passive income. And when it comes to passive income usually people are thinking about real estate investing. We’re real estate investors, so I get that.
And I’m also a writer. There are many reasons why, one of which is passive income.
For many people, writing comes easier.
We are story tellers. It’s in our DNA. We want to tell the stories of our life and we want to hear the stories of others.
That’s why writing works so well. It connects us, at a deeper level.
You can even get that same connection with nonfiction writing.
You have a story that needs to be told.
Plus, you can create recurring and sustainable income. A lot of clients come to my CPA practice, looking for ways to create that income with real estate. These days, it’s hard to find a rental property for less than $300,000. So with 20% down, you’re looking at a down payment of at least $60,000. Your return on your $60,000 investment with a mortgage, property tax, insurance, repairs and vacancy factors might get you, at most, $500 per month net. Most likely, it’s closer to $250-$300/month.
On other hand, there are two systematic approaches that consistently bring in income of $50,000 – $100,000+/year. Sustainably. Reliably.
All you have to do is put in the work and follow the program. Of course, your results may vary. I’ve seen case study after case study. The ones that struggle are the ones who deviate. But let’s say you only get half that result. Would a guaranteed income of $25,000 (over $2,000 per month) make a difference in your life? And, just like real estate, a book portfolio that is linked to a business will make it go up in value.
The only difference between real estate investments and writing books is that writing the return on cash investment is much higher with writing, but to be a writer you will need to put in the time and learn some more skills.
To cut to the chase, the steps are:
#1: Develop your strategy,
#2: Write a series or a linked set of works,
#3: Write to a ready and willing market and
#4: Use the right strategy to get your books in front of your market.
Tax Savings for Writers
Once you are a published author, you have a lot of options when it comes to tax deductions. There are the normal deductions for business such as:
Cell phone & cell phone plan,
Computer, printer & other equipment used in business,
Business use of vehicle,
and other expenses that are “ordinary and necessary to the production of income.”
Writers have another possibility, though. If you are a published author, you’ve already proven that you have a legitimate business purpose. Your next book could be about anything, but you’ll need to do some research first.
And, within limits, that research is deductible. For example, let’s say you want to write a book about Italian cooking. So you decide to go to Italy and study cooking. It’s a deduction even before the book is written.
But first, you need to be published.
That’s just the beginning. If you have a writing business, you can create passive income streams using the 20 Books to $50K/year model or the 28 Books to $100K/year model. (The difference is basically fiction vs nonfiction.) And as a published author, you can pay less in taxes.
Imagine that. Passive, sustainable income streams that flow straight to your bank account. And a whole lot less that flows out to the government.
If you’ve ever dreamed about writing a book, maybe it’s time to take another look at that.