(Updated May 2011)

I get asked this question a lot. Actually, I get asked “So, have you made your first million yet?” a lot (the answer to that is no, not even close!). I think it must be all the news stories about JK Rowling and Stephenie Meyer and those celebs who write books and get 6 figure or multi-million dollar advances (I wish).

A New York Times bestselling author (her sixth book debuted at #19 on the mass market list) has posted up her earnings on the book and just (Nov 09) posted up another follow up royalty statement (you should read both of them to get the whole picture–and also the comments). It’s a great blog post and gives you an idea of what authors *really* earn on their books.

Keep in mind that I’m a YA author and that we tend to get smaller advances (much! — my first advance was nowhere near $50,000.00. — though also keep in mind that an advance is just that…an advance against the royalties your book will earn…kind of a pay me now or pay me later kind of thing…) YA books also don’t tend to have nearly as large a print run (especially first timers like me). I think my first print run was around 20,000 (and honestly, I’m not exactly sure…those royalty statements are hard to read!).

As you read that, you should also keep in mind that she’s talking about ONE book and it’s a mass market paperback. To really get an idea of what your potential income is, you need to consider that you’ll (hopefully) get to the point where you have more than one book in print, that your earnings will be very different on a hardback vs. a paperback vs. a mass market paperback, and that even one book can generate multiple revenue streams (foreign language editions, eBooks, Kindle, audio books, etc.). So just looking at numbers for ONE book in ONE format really only gives you the tip of the iceberg.

So anyway, read on and see what you think. I bet it will surprise a lot of you!

There are some other things you should know too (so many people stumble upon this post according to the logs, I figured I’d clarify things some more):

• Most publishing houses send out royalty checks twice a year. Some send them out quarterly. Advances, though, are generally paid upon contract signing & delivery (1/2 on one, 1/2 on the other), though sometimes this can be split into three payments. It all depends on your contract.
• Depending on your contract, you can earn additional money off of a single book by selling to foreign publishers and audio book publishers. Each of those sales is like a new contract with new terms. For instance, I’ve also sold the Spanish, Czech, French and Croatian rights to Sucks to Be Me. However, you have to take out foreign taxes and what not. It also takes a while for all of the contracts to go through and for the books to actually come out. You can also sell movie/tv rights. NOTE: when I say the foreign rights can take a looooong time to pan out, I’m serious. 
• If you can write a few books a year (and sell them!), you can make a decent living as an author. As long as a book is in print and selling it is generating income for you (albeit 2 to 4 times a year when most people get paid every two weeks). But if you’re a one book a year or less author, it would have to sell a boatload of copies for you to live off of it. Seriously. A boatload. Like Queen Mary sized. Ellen Hopkins made an excellent point — it makes a huge difference whether or not we’re talking hardback sales vs. mass market paperback sales. The numbers are different. She’s generally a one book a year author and does pretty well — though she also sells quite a few books now that she’s built up a following.   There’s also a difference between trade paperbacks and mass market paperbacks. This article from the NY Times covers it well. And all of it, of course, depends on what’s in your contract — i.e. what percentage the author gets and whether it is off of the cover price or (essentially) the publisher’s price (sorry, I forget the exact term).
• The author gets a small percent of the total price of a book. Me, I got something around a $1 per hardback sold on my first book. It varies completely by contract (and is a good reason to have an agent since that’s the stuff they negotiate). The publisher also  gets a percent, though I’m not sure exactly what % that is (I imagine it varies with every book and every publisher). Everyone has a piece of the pie (distributors too).
• If you have an agent (which I do now, but didn’t for the first book), they also take a %.

So basically…money is not a reason to write. Or rather, it shouldn’t be “the” reason. You write because you have stories to tell. Because it is something you love to do. Because you can’t imagine not doing it. You don’t write because you think you’re going to be the next Stephen King or J. K. Rowling or Stephenie Meyer.

Update: And read this post by Author/Agent Mandy Hubbard. That really breaks it down for you. Though keep in mind that epublishing is changing the marketplace in many ways. Everything I’ve talked about here is so-called “traditional” publishing. I really can’t comment on those writers that have gone the solely epublished route as I haven’t done that myself.