Author Sharon Hale has a great entry over at her blog on the nitty-gritty realities of making money as a children's book author. Or, rather, not making that much money as a children's book author.
Here's a sampling:
"Case study. A children's author and an adult SF author go to a book signing. They spend two hours there and sell the same number of books.
The adult SF author has a 700-page tome that sells in hardcover for $35. Writers get higher percentages for adult books, usually at least 15%, so each hc sold earns the author about $5. Sell 50 and he's got $250. Paperback prices vary (mass market much less than trade) but let's say it's about $15 for a paperback. He makes about 10% on that, sells 50, earns $75. For two hours plus travel, that's decent. He'll also get to meet many fans, which is another bonus of doing events.
Now the children's book author. The hardcover sells for $18. Children's writers make about 10% on a hardcover, so if she sells 50 that's $90. For a paperback, $8 with a 7% royalty is common. For 50 books that'd be $28.
Adult author total: $325.
Children's author total: $118
Plus agents take 15% off the top, and then authors are self-employed and so pay higher taxes.
Now these are big numbers. Selling 50 hardcovers and 50 paperbacks at a signing is a great signing for most authors, so this is just an example. I've done signings where I've sold zero. All authors have. And even though a 100 book signing is tremendous, I have to sells tens of thousands of books to make a living at it, so even having a few great signings several times/month wouldn't enable me to write for my job."
Will I continue to write what I love? Of course.
Will I be giving up my day job to do it? Of course not.