Jim Macdonald makes an excellent point about Yog's Law at the Making Light blog. An indie author has to wear two hats, but the money (after legitimate expenses) still needs to go to the author.
In other words, you should have a line item in your business plan for paying yourself. Otherwise, indie publishing is simply vanity publishing in disguise.
For the record, I don't agree with Jim's 10-15% per book for author share. Personally, I think that if you're paying 85% of each title you sell towards fixed costs, then you're paying way too much.
To break the numbers down further, here's what DH and I did for my business plan. Let's say I hire Joe Konrath's cover artist, and he charges me $200 for the cover art. I hire someone to format my e-book for $100. I hire a freelance editor for $2000 (yes, that IS the going rate for legitimate editors). I'd have to sell 1150 copies of Blood Magick on Amazon at $2.99 in order to cover my fixed costs.
Like any other business owner, I'm looking at ways to trim those costs and make a profit faster. What if I hire someone looking to make a name for herself as an artist at half that cost? What if I trade editing with other writers? What if I do the formatting myself? That bring my fixed costs from $2300 down to $150 (i.e. $100 for the cover art and $50 for the alcohol to my writer bud acting as editor). Now I only have to sell 75 copies of Blood Magick to cover my fixed costs.
By the way, do you have a business plan? Are you going indie? Then you need one. Trust me, it'll help keep you on track.
On Not Writing
9 hours ago