I wish I had time to read Justine Larbalestier's blog more frequently and not because I want to read about her fantastic travel life. (My big trip in March was to R.J. Julia Booksellers and that wasn't even for a special event, just a walk-around when I was in town for a school appearance.) No, what I like about her blog is that she occasionally covers writerly stuff.
For instance, in one of her recent posts she linked to an earlier one in which she explains how advances work. In talking with people I find that there's a lot of misunderstanding out there about how little money is involved in most book deals and how many years it takes to collect it. It's not unusual for me to meet folks who think they can knock off a book to generate extra, steady income.
The only thing I would add to Justine's description of how money is paid out is that many unknown writers won't be able to make a sale just on the basis of their pitch and a few chapters. They'll have to submit an entire manuscript for consideration. So while they may be receiving their advance over a four-year period as she describes in one example, they may have spent six months, a year, or who knows how long, working on the manuscript they submitted before they saw any money at all. So I think you need to keep that in mind--when you spread your advance over the time you worked on the book and not just the timeframe of the contract, it comes to even less per year.
For instance, I worked with an editor for a year on my first book before she offered me a contract. I can't even recall how long I worked with her on the second without a contract. In my mind, I have to include that work time when I'm thinking about how much money came in from those two books.
By the way, many book business people would suggest that you not do what I did--work for a long period of time without a contract. In the case of the first book in particular, I had had only two short stories published and no one else was beating a path to my door begging for my work. My reasoning was that I had nothing to lose, and it did all work out for me.