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I know that ghostwriters exist. Nobody believes that famous people's memoirs were written by the famous people who are too busy to sit down and write a thousand pages.
It turns out that there is also a thriving business in writing stuff for the everyman. Theres a market in writing for folks who want their memoir for their grandkids, but don't have the skill to write it, or people with a grand idea for a novel, but without the time or skill to put it to press.
These jobs are either handled on an ad-hoc manner by someone who just happens to know someone, or by commercial outfits that link writers to folks who need them.
The advantages to ghostwriting are that you get to write stuff you wouldn't normally try.
Gates is a literary and screenplay writer. His first ghostwriting gig was to write a chick-lit novel. It's absolutely not something he'd have considered on his own, but it worked.
Ghostwriting is a work for hire. You get paid up front, but no royalties, no movie rights, etc.
On the other hand, you don't need to worry about whether the book will ever sell through the advance and start earning money.
Mr. Gates assured us that he knows ghostwriters who are earning over $100,000 a year. That's not bad.
My conclusion is that ghostwriting is an interesting idea, but not for me. I write too slowly. You need to be able to chunk out a reasonable sized book in a few months, not a year, to make this viable.