The story is that back in late 1938 Heinlein, who could have used a bit of cash, wrote a story to submit to a contest for Thrilling Wonder Stories magazine, the grand prize of which was $50. Heinlein wrote the piece, decided it that too good for Thrilling, and submitted it to Astounding Science Fiction instead, which accepted it in 1939 and paid him $70 -- $20 more than he would have got at Thrilling. The money was so good that Heinlein decided this writing scheme had its advantages and decided to keep at it. Thus was the power of a penny a word -- Astounding's going rate -- in 1939.
As I was reading this again I was curious as to what at penny in 1939 would rate out to here in 2007, so I used the Consumer Price Index Calculator from the Federal Reserve Bank of Minneapolis to find out. Turns out that to you'd need fifteen cents in today's money, more or less, to equal the buying power of that 1939 penny. Dropping Heinlein's $70 into the calculator, you find that it was the equivalent of $1,034.89 today. Which is, you know, fairly decent.Heinlein figured he could sell enough stories at $70 each to keep him and his in the manner to which they were accustomed. Today however that would require selling a 7000 word story at 15c/word (ish) and that is tricky. He notes that when Jim Baen's Universe commissions a story they pay enough. Unfortunately no one, not even Baen, pays that kind of money to a new writer sending in an unsolicitated story. In fact new writers mostly seem to get stuck at a rate under half that or 6c/word meaning that a modern day Heinlein would get $420 for his 7000 word story (if you're lucky you may get 8c/word - giving $560 for a 7000 word story). Now it is true that, especially as eZines become more popular, short fiction tends to bulk up a bit because the cost of additional electrons is negligable whereas the cost of additional pages of printed matter is not, hence novelettes (7500-17500 words) as almost as acceptable as short stories (<7500). But there is a limit and, as JBU's sub guide says, shorter is generally better:
The question of the length of story we'll buy from new or little-known authors is also complicated.There is no preset limit to length, as such -- from any author. If a completely unpublished author were to submit a good enough novel to the magazine, we would consider publishing it.
BUT -- but but but -- the thing is, it's complicated. And the longer a story is, from a newbie, the more tangled up it's likely to get in the complications. There is no hard and definite line, anywhere along the way. Still, you can pretty much take it as a given that the longer a story gets, the lower its chances are to be selected.
It's almost always possible to fit in a good short story by a newbie. (Or anybody, for that matter.) A novelette is more problematic, but still not usually a major problem. Once you get to novella length, the problems start escalating -- and with a novel, even a short one, they're still more extensive.
All that said, it's certainly not impossible to do so. Indeed, if the story is good enough, we'll do whatever we need to in order to fit it in. But, once you get to longer lengths, the story really has to cut the mustard.In fact to make a $1000 sale at 6c/word you need to sell something that is at the top end of Novella range - a shade under 17000 words - and it is clear that a 17000 word story is not as likely to be bought as a 7000 word one is. In addition you need to sell quite a lot of these stories to make a living. Unfortunately there aren't a lot of places willing to buy them. For SF there is Analog, Asimov's, JBU Magazine of F&SF and maybe a half dozen more that pay 6c/word or better (a good list is here). If you want to survive you are going to have to sell at least two stories a month at this rate (and far more than that if you sell only 5000 word ones) and this simply isn't possible. Even assuming you can write a new saleable 10,000 word story every two weeks and you get paid 8c/word for it (both of which are non-trivial assumptions) you are looking at annual income of $20,000 which is the same as you'd earn on a $10/hour wage working full time. This is not viable so you are only going to write short fiction if you get some other benefit (name recognition, pleasure) out of it.