Let’s talk about something that doesn’t affect some other authors as much but does horribly for others. specifically foreign exchange fluctuations.
Making the Most of Forex
One of the things that you can and should do to reduce forex fluctuations and forex costs is to use intermediary services like Wise. Basically places like Wise allow you to open accounts in multiple currencies and then receive payments in those currency.
Which, with places like Amazon paying in Euros, Pounds, Australian dollars and the like, you can save anywhere from 2- 5% on any transaction. I’ve known people to lose a few hundred dollars off a single bad wire transaction between forex fees and wire fees.
Whereas places like Wise take a minimum amount when you exchange, it also gives you the option to hold and carry the currency forward to get the best rate in the future. Of course, trying to eke out a few cents gain (or often, even less than that) can be difficult and might not be worth it for most people, especially when you include opportunity cost of the time spent.
But that’s just ancillary to the point of this article. Instead, I wanted to talk about the strengthening US $ dollar and how it affects us.
The Strengthening Dollar
If you haven’t noticed, the US dollar has strengthened significantly. It’s gone from like $ 1.10 CAD to $1 US to $1.37 CAD to US $1. The pound on the other hand has gone the other way, growing weaker as the UK market weakens and recession looms.
Now what this means is that businesses that have a significant foreign (non-US) presence have actually take a loss.
We are one of them.
Unlike many other indie authors in my genre, the UK actually makes up 10% of my revenue previously. DE has fluctuates but could be as much as 15% of my monthly revenue.
So a 20 % drop in currency rates can mean a 20% drop in income even if I’m selling the same number of copies.
This is important since most of my expenses are in US $. I pay narrators, editors and translators in US $ and a small number in Euros. Almost none of them get paid in pounds.
This should mean I’m running a loss (and I sort of am, but being able to receive and pay in the same currency means I don’t lose on FOREX fees consistently till I have to change).
However, because I’m Canadian, the weakening CAD $ in comparison to the US $ means I do see an increase in my total CAD $ revenue.
On one side, expenses are higher. On the other. revenue for me can be said to increase.
And this is where holding my money in US $ helps. Since I don’t exchange some of the money coming in, I can pay in the same currency and ignore fluctuations. At least for my expenses.
For income. I eventually need to transfer everything to CAD$ to pay for my salary. But as mentioned, that’s in my favor. In that sense, it’s not a concern, though the dropping Pound and Euro when I look at my income on a US$ basis is painful.
I just have to remind myself it’s not so bad when I transfer it all to CAD$.
On the other hand, if you’re a US based author? With 20-30% of your income coming from non-US sources?
So, something to consider it you’re looking at your income this year and wondering what is happening and why it seems like you’re doing better/worst. Forex makes a big difference.
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