Is Your Book an Asset or a Liability?

by Nancy Humphreys on January 4, 2011

The answer to this question could be “yes” or it could be “no.” As Robert Kiyosaki preaches in his Rich Dad Poor Dad series, a liability is something that takes money out of your pocket while an asset is something that puts money into your pocket.

So, is your book taking money out of your pocket or is it putting it into your pocket? Or is this even the right question?

Your book can be an asset even if it doesn’t sell

Smart business people and others who are self-employed choose to write books regardless of whether they are assets or liabilities. Why? Books create instant expertise and get these professionals more clients.

Other professionals who write get speaking gigs. For example, one fellow interviewed for the article, “As You May Have Read in My Book,” in the Wall Street Journal wrote a guide that “sold about 2,200 copies for $14.99 apiece, [and that] has helped him land more than a dozen paid speaking gigs in 2011.”

So even if a book costs more money in expenses than it brings in from sales, it may actually be a asset for its author.

It can be an asset and provide you with passive income

This weekend my partner and I went down to the public library and played a Kiyosaki game called Cashflow for kids. It was fun. And at the same time it was a learning experience for both of us, even though we’ve read most of the Rich Dad book series.

So here’s the thing the Cashflow game glosses over and so does most of the Rich Dad series. That is Robert Kiyosaki’s definition of “owning a business.” I thought, and probably most readers think, “owning a business” is the same as being self-employed. It isn’t.

In Cash Flow Quadrant Kiyosaki clearly makes the point that owning a business means you own an asset that produces passive income for you rather than earned income. So what is “passive” income? It is income you do not have to work very hard for. It is income that the IRS calls “capital gains” or “rent and royalties.”

This is why a book, if well-written and well-marketed, can sometimes bring in a profit and create passive income for its author. A profitable book is a form of owning a business.

A profitable book can even cancel out some of your liabilities

So, if you think writing is work, you’re right. But it’s work that can save you money as well as make money for you. Your expenses (or liabilities) for writing and publishing are usually tax deductible. If you hire someone else to work with you on that, you’ll save time and get a tax deduction for what you pay your helpers.

Furthermore, a profitable book is an asset that wins hands down when it competes with advertising your business services. Advertising, unlike a book, can only cost you money. Advertising is a liability you must pay. But a profitable book is an asset.

If you’re in a service business, a book that is related to your services can be worth more to you than Google AdWords, a yellow page ad, or even a listing in your professional association directory. And beyond this, your book might even make you feel like a celebrity! And that’s an asset you can keep forever!

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Marketing Your Book to Libraries Marketing Your Books to Libraries: An Insider's Guide for Authors by former librarian Nancy K. Humphreys includes: 
  • How to tell what kind of library to target
  • Types of librarians and books they order
  • Strategies to get past the "gatekeepers" who influence librarians
  • Right ways to approach librarians most likely to order your book

Learn more »

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