Louisa May Alcott and Digital Money
by Louisa May Alcott may have been a writer in the 19th Century but she knew a trick or two that those who write in the 21st Century ought to be aware of. Not least of all about how to make the most of royalties.
I’ve recently read a volume of letters form Louisa May Alcott, she of Little Women fame. It was clear that things were not so different for writers in the latter half of the 19th century from how they are for those of us who live in the 21st century.
She was rejected a lot before she was accepted, she had wrangles with her publishers, she was poorly paid for much of her work and then, when she hit the big time, when Little Women was published, lots of people pestered her to try and find out what her secret was.
She was shrewd.
She knew even then that:
§ Talent wasn’t enough
§ Publishers needed to be watched
§ It takes a long time to get to the stage where your work will sell well.
§ Money is best used digitally rather than the analogue way.
What, you may say, is digital money and how on earth could someone who died before the beginning of the 20th century know about digital anything?
Digital earnings are those which come over and over again. All writers who work for royalties know about this. You spend 100 hours writing your novel. The advance probably pays you about £6.00 an hour. As the royalties come in, and you’re paid over and over again for that same work, the amount per hour goes up – without you lifting a finger.
The problem might be that it’s still only a pittance and you’ve got to feed, clothe and shelter yourself. Right, well, take the temporary job at Tesco’s or at the local pub. Every hour, though, that you’re working there is an hour where you might not be able to make money that could become digital. Still, you’re amongst people and that can be fodder for your writing.
Ms Alcott knew poverty. They say you should always write about what you know. And Little Women was what she
knew. Consequently, when she did get some money she was very careful with it. She lived simply. She never counted on her writing income so invested it. And when the big one came in, she invested seriously and watched what was happening on the stock market.
Louisa May Alcott, then, was a mixture of creative artist and hard-headed business woman.
Could we all do the same? It’s tempting isn’t it, when that small but still welcome royalty cheque comes in to go and splurge it on something nice? That’s over in a few hours. Wouldn’t a better idea be to invest it and watch the money grow, digitally? So one heap of digital money creates another?
Look at this demonstration for a modest royalty sum with a modest 2% growth per month.
April 150
May 153
June 156.06
July 159.1812
August 162.3648
September 165.6121
October 168.9244
November 175.7489
December 179.2639
February 182.5061
March 186.5061
Miss Alcott’s Investment of Little Women money
April 5000
May 5100
June 5202
July 5306.04
August 5412.161
September 5520.404
October 5630.812
November 5743.428
December 5858.297
February 6094.972
March 6216.872
Great if you can just leave it there, and if your shares pay dividends, put them into the mix as well. If it’s money you hadn’t counted on, why use it if you can help it? And note that this covers what you owe the taxman.
By the time the big one comes in, you’re in the habit.
Louisa May Alcott was able to cancel a mortgage that she’d given someone on a property because of her astute business dealings. If one can crank the amount of money invested up so that you can live on what that money earns…
Of course, the big one helps….
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