Writing an E-Book to Create Passive Income

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PIMD: An E-Book can be a fantastic way to create passive income. As is often the case with passive income, most of the work is done up front and the rewards continue to come later. Wouldn't you love to hear from someone who has just completed the entire process of writing one? 

Well, today's guest post is from The Physician Philosopher, author of the newly published book, “The Physician Philosopher's Guide to Personal Finance: The 20% of Personal Finance Doctors Need to Know to Get 80% of the Results.” Enjoy!

One of the posts that encouraged me to start The Physician Philosopher blog as an additional income stream was The List of Physician Side Hustles here on Passive Income MD.

Passive income is a powerful tool we can use to achieve financial independence (FI). Obtaining FI is more than just getting to “our number” and passive income can help create a hybrid model of financial independence.

The physician side hustle list includes many opportunities to make passive income. Today, we are going to discuss one in particular: self-publishing a book.

We will discuss the financial aspects – the costs and potential profits – from self-publishing The Physician Philosopher's Guide to Personal Finance on Kindle Direct Publishing.

Come see the juicy details on a book that was given high praise from The White Coat Investor.

Ten Steps to Write Your Own E-Book

Before we get to the juicy financial components of self-publishing a book, here is the cliff notes version on how to write an e-book.

The Hard (Free) Work

(Optional) Step 1. Put some on some headphones and pick out your favorite music for creative ventures. My eclectic musical taste ranged from Matt Kearney and Imagine Dragons to Acoustic Pop Radio and 90's hip-hop. Use whatever gets your creative thoughts flowing!

Step 2a. Using a word processor of your choosing (Microsoft Word, Google Docs, Pages, etc) and write down the exact problem you hope to solve (or main story you hope to tell) with your book. This should be your focus throughout. For example, I wanted anyone who read my book to know exactly what they should be doing at each stage of their career from the 1st year medical student to the freshly minted attending physician.

Step 2b. Come up with a temporary title and subtitle. For a while, my temporary title was simply, “The Physician Philosopher Book.” The subtitle of my book was always “The 20% of Personal Finance Doctors Need to Know to Get 80% of the Results.”

Step 3. Create an outline for the entire book, including all of the pertinent topics.

Step 4. Write the book without revising. Ideally, you want to get into a stream of consciousness where the words are flowing onto the page. You can clean up the grammar and wording later. [This is the reason for the music! I'm listening to Ed Sheeran radio as I write this guest post right now. Yes, I just admitted that.]

Step 5. Once completed, go back and read the book. Now is the time to revise it. Make sure you are saying what you meant to say. Alternatively, you can perform your revising after writing each chapter instead of waiting until the end of the book. The point is to avoid revising AS you write. Do it after.

Step 6a. After your first revision, pick a friend who is similar to your target audience and will provide honest feedback. Have them tell you their thoughts. Then, make another revision based on their input.

Step 6b. Buy your friend who read your first very rough draft a beer. They will likely need it.


Time to Start Spending Money

Step 7. Send the revised rough draft to two places: An editor and 5-10 people who are your target audience. For me, this involved sending it to a couple of my regional anesthesia fellows and a few of my email subscribers. My editor was a close friend of ours.

Step 8. Create a cover while your editor is hard at work. And pay for it, unless you have some awesome graphic design skills yourself. No need to skimp here. We will discuss more on this below.

Step 9. Choose where you will be self-publishing. For me, this was Kindle Direct Publishing. You need to format your book according to their standards, and there are tutorials out there for this.

Step 10. Write a guest post on Passive Income MD Promote your book.

The Cost of Self-Publishing

Self-publishing The Physician Philosopher's Guide to Personal Finance cost me just shy of $1,000. If I had gone a more formal route, it might have cost substantially more.

If you have professional editing experience or graphic design experience, you can save some money, but I wouldn't attempt this without serious thought. Both of these services require payment for it to be worth your time. No one wants to read your unprofessional book with an unattractive cover.

Let's break it down into three sections: the free stuff, the editing, and the cover.

The Free Stuff

Friends and subscribers are valuable. In order to get a sneak peek at your work, they will often review and edit your book. That's exactly what I did.

One of my best friends took the first crack at a very rough first draft of the book. He is interested and well-read in personal finance. He is also married to one of the best physicians that I know. These two characteristics made him a perfect fit.

We reviewed his thoughts on that very rough first draft while our kids played in the local Chick-fil-A play place. Next time, I'm going to recommend a less stressful environment. You live and you learn.

I also asked several of my email subscribers and friends to read a later version that was closer to the finished product. Given that my book discusses the 20% of personal finance you need to know, I specifically asked them to tell me what was unnecessary or left out. This was free, too.

Good friends and readers make life much better!

The Cover Design

I spent several hours trying to figure out the best way to create a cover for the book. It is the first thing that people see, and – let's be honest – most people read a book by its cover despite the cliché that teaches us the opposite.

Money spent on a cover is well worth it. Okay, great, but how much does it cost?

Answering this question involved typing questions into search engines and emailing other people who had self-published.

In the end, I decided to create a cover design contest. It cost me around $400 because I needed an e-book cover and paperback cover.

In the contest, you tell the graphic designers a lot of information: your title, subtitle, author information, what you want on the back cover, etc.

However, the most important piece of information is your vision. You discuss what the book is about and what problem you are trying to solve. Then, these creative geniuses go to work.

In total, I had 16 graphic designers pitch over 100 different designs/variations in my direction. Some of them were horrific (like the one with a surgical mask over George Washington's face on a $1 bill, or the time one of them found a picture of me on the internet and used it on the front cover – ain't nobody got time for that), but most of them were really pretty good.

For me, it was important that the cover was clean and clearly linked back to the branding on my site. I didn't want people to think that someone else had written the book. If they found the book helpful, then they would know where they could find more from the same author.

That led to the cover above being chosen as the winner. It is clean and intentional.

Professional Editing

The other major cost is professional editing. I looked into how much this would cost if I outsourced this as well. There are sites that perform similar functions to the cover design site mentioned above.

For these editorial sites, they keep a list of potential editors instead of graphic designers.

After checking into those sites and coming away with $1,000 to $1,200 estimates to edit my book I decided not to proceed. I thought I was stuck with editing my book on my own, which was not a good situation.

Then, my wife reminded me that one of our best friends is a professional editor who graduated from the number 1 journalism school in the country, Missouri's School of Journalism.

Being a good friend, she offered to edit my book for substantially less than what the other professional editors were offering.

If you know a graphic designer or editor, you can save a lot of money!

The Potential Profits

When publishing an e-book, Kindle Direct Publishing has two different royalty options. For books less than $10, you can choose a 70% royalty option. In other words, you get 70% of the profit (after cost is taken out).


So, for each $9.99 e-book that I sell, I will stand to make $6.93.

If the book is $10 or more, then the royalty agreement is 35%. I wasn't interested in taking home 35% of a book that I spent 9 months writing.

Not everyone loves reading e-books, though. Some people prefer holding a physical book in their hand. So, I made a paperback book, too. (Yes, the second cover cost me more than just buying an e-book cover.)

For the paperback, it works a little differently because real cost is involved in printing the book. So, the paperback version is priced a little higher at $15. The royalty on this deal is 60%, but only after cost is incurred.

So, each $15 book earns $5.55. In other words, I make less on a paperback book that costs the customer more. This is well worth it for those that love holding a book in their hands, though.

Take Home

There are a lot of moving pieces when writing a book. Every book has the potential to become a low (but steady) income stream.

That said, once the book is written there is nothing that is more passive than book sales. The product is out there and all that is required is a bit of self-promotion.

I'd go this route again, and am already considering writing another book. Writing a great book often costs money up front. The process isn't so difficult that you cannot do it on your own, but remember to invest in your business (and books)!

Oh, and click the following link and go buy a copy of The Physician Philosopher's Guide to Personal Finance: The 20% of Personal Finance Doctors Need to Know to Get 80% of the Results.



  1. Congrats on writing your book! I’m constantly amazed by your productivity.

    Your suggestions on letting the words covers it and worrying about the editing later is a great idea. I tend to perseverate over each sentence and ur takes me forever to write everything.

    I don’t see book writing in my near future but am looking forward to picking up a copy of yours!

    Good luck!

  2. Great and informative post TPP!

    Some real great tidbits on the process of going from thought to paper which to be honest I knew nothing about.

    In the back of my mind I have ruminate about doing a book (both fiction and non-fiction) and one day may actually breast the forces of inertia that always seems to hold me back for some time (much like how long it took me to start a blog).

    Congratulations on the major achievement. I can only imagine what it feels like to hold in your hands something that you created. Wish you much success my friend.

    • Thanks for the support, X-ray!

      You should totally do it, but only if there is a specific topic that you are passionate about or story you feel it would energize you to share. Writing a book is work, but I always looked forward to it. Once I had the outline in my mind, writing became fun. I looked forward to it. I can’t always say the same about blogging. There are days where I am just not in the mood to write, but have a forced habit to write as many days as I can.

      Actually, I’ve done the math and I wrote over 250,000 words in 2018.

    • Based on the math shown above, I need to sell about 200. I am about 25% there right now. I gave away over 1,000 free copies to my email subscribers and their friends.

      Hopefully, people find the book helpful and share it with other medical students, residents, and early career medical professionals. I imagine once it catches some momentum, I’ll hopefully start “breaking even” every month or two 🙂


  3. Thanks for the informative post. I was always curious about the process. I’m also curious about how you determine how many paperback books to print out and who makes that determination (you? publisher? etc.).

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