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I'm not a writer, but I attend science fiction conventions, and it's my impression that for every writer who makes enough to quit his/her day job, there's another 5-10 who can't unless they have a working spouse that makes enough to take care of the mortgage, health care, etc. I don't know whether the numbers are up or down, but I know that this was true 20-30 years ago, just as it's true now. Two published authors (one Fantasy, one mystery) work at my current employer.
Giving away free books sounds really tough, and it is if you don't have many published books, but if an author has written several series, it may be worth it to give away the first book in the series just as advertising.
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