Passive Income In The UK - #6 Faith Archer

Building Passive Income In The UK:

An Interview with Faith Archer

Welcome to this interview series focusing on UK-based passive income builders. This is the sixth interview of the series. Although each person has their own unique combination of income streams, it is not hard to see a common thread between them. They all build upon multiple sources of income and they’re not afraid to try something new.

I hope you find this series enlightening and encouraging, opening your eyes to the multitude of ways you can reach your financial goals. Talking to passive income entrepreneurs has definitely inspired me.

Today, I’m talking to Faith Archer.

Please introduce yourself

Hi! I'm Faith. I'm a married mother of two who writes about money as a blogger at Much More With Less and also as a personal finance journalist. My blog is all about moving to the country, living on less and making the most of it.

What Does Passive Income Mean To You?

Passive income is money that racks up as you sleep, ideally without having to lift to a finger. Personally, passive income means I can work part time from home, and my husband has been able to return to working for the charity sector.

What passive income sources do you have?

We have three main sources of passive income: Rent from a buy to let property, dividends from stock market investments and a bit of interest from cash savings accounts.

How does your passive income compare to your active income and your expenses? 

It's tricky as I'm self-employed, so my earnings fluctuate, but I reckon passive income covers about a quarter of our expenses. However, we don't spend all our passive income - the dividends from investments just get ploughed back into buying more investments.

What is your long term goal with passive income?

My main goal is to grow our passive income so that when we want to work less, then income from rent, ISAs and pensions can replace our earnings. It's a long term goal because we've already been lucky enough to move to the country, clear our mortgage and switch jobs.

What are your most passive and most active income sources?

Most passive income source is our investment income. I'm a buy and hold investor, so after putting in the effort to choose investments and a platform in the first place, it just keeps rolling up. We chose a rental property to be as passive as possible - so a house, rather than a flat involving service charges and negotiations with other owners, and a modern property that would involve minimum maintenance.

We also chose a tenant keen to stay for many years! But buy to let will always be more effort, due to renewing insurance, arranging an annual gas certificate and coping with any repairs. Most active income comes from my writing and my husband's job.

What is your favourite passive income source and why?

I've become a big fan of investment income, because you don't get unexpected bills like having to buy a new boiler. It's also easier and cheaper to get hold of any money if needed.

Which passive income source has been the most challenging to build? And did you expect this when you started building it? 

Again, investment income. Property felt easy in comparison - I've bought and sold several times in the past, and knew what I was looking for. With stock market investments, it was more unfamiliar territory, I had a lot more information to get to grips with, and I still find it hard to plunge in. Once you've made the decisions, it's a lot easier!

Do you think your passive income sources will provide consistent income over the long term?

Yes. There's a lot of demand for rental property in our area, so I don't think we'll have problems finding tenants. On the investment side, I chose investment trusts with a long track record of paying out rising dividends (think 30 years plus).

There's no guarantee, but I don't think they'll chop the dividends paid any time soon. I also use some tracker funds that invest globally and automatically rebalance, so I reckon they'll take care of themselves too.

What passive income sources would you like to have in the future? Do you see any areas of growth?

I'm keen to develop my blog. My earnings so far are driven by writing, so I'm keen to increase more passive income - like advertising, affiliate links and maybe creating money related courses.

Do you plan to pass on these income streams to your beneficiaries?

I’d like my children to make their own way in the world, but I'd also love to be able to help them if they really need it. Reckon I'll be too risk adverse to run down all our money before we die, so there should be something to pass on, both to our children and charities.

Has passive income-building changed how you save, spend and invest? If so, how?

Focusing on passive income means I'm keen to get the most bang for my buck, rather than leaving money in a bank account earning nothing at all. It's had a big impact on our lifestyle, allowing us to work fewer hours.

What are the main advantages and disadvantages to being UK-based when building passive income? 

I suppose because I've always earned money in the UK, I've never thought about the pros and cons compared to elsewhere in the world! I suppose Isas, pensions and the personal savings allowance allow people in the UK to hang on to more of their money without the tax man taking a cut. There are also major advantages when selling residential property in the UK - you don't get taxed on gains from your main home.

What advice would you give to someone looking to build passive income in the UK?

Get started! Even small amounts, invested regularly, add up over time. And take advantage of the tax breaks from ISAs and pensions.

Thank you for the interview. Would you like to add anything else?

Passive income, from cashing in our house in London to buying one place for us to live and one to rent, has made a massive difference to our lives. It means we can spend less time in the office, and more time together as a family. That's why I always say money isn't boring, because managing our money has brought us freedom and choice.

And finally, where can people find you?

My Blog: Much More With Less

Twitter: @MuchMore_Less

Instagram: @muchmore_less

Facebook: @MuchMoreWithLess

Pinterest: Much More With Less

My Remarks

Faith has a solid combination of income streams. Her writing, rent, investment income, bank account interest and she’s in the process of growing all of them simultaneously. She can grow them all at the same time precisely because most of them are passive. They all just require some up front effort.

If you’re looking to start generating passive income, my suggestion is to heed Faith’s advice and get started!

What do you think of Faith’s passive income? Remember to smash that like button and leave your comments down below.