If You Were a Company, Would Anyone Invest in You?

Your salary is only the top line. Your future depends on everything beneath it.

By Fahmida Rahman ACMA | Wealth & Investment Coach | 25+ years in investment banking

Picture a business with revenue of £120,000 a year. It has a strong reputation, a loyal client list and a founder who works relentlessly.

Then you open the accounts. Nearly every pound that comes in goes straight back out. A large cash balance sits idle. Several old assets haven't been looked at in a decade. And the entire operation stops the day one person does.

You wouldn't put a penny into that business. Yet it may be a fair description of your own finances.

I spent more than 25 years in investment banking and trained as a management accountant, and that combination leaves you with one lasting habit: you are never impressed by revenue until you have read everything underneath it.

A company can report record sales and still go under. A woman can earn a six figure salary and still be one redundancy away from serious financial trouble.

So let's open your accounts. Here are the five areas I would look at, in the order I would look at them.

1. Your margin

Your salary is revenue, and revenue flatters everybody. What counts is how much of it stays.

Take two women of the same age. One earns £70,000 and invests £1,000 a month. The other earns £150,000 and invests £200 a month, because the house, the school fees and the holidays have risen with every pay rise.

After 20 years, assuming 9% annual growth compounded monthly, the first has around £668,000 and the second around £134,000.

She earned more than twice as much and finished with one fifth of the investment wealth.

The 9% annual growth assumption is based on the approximate long term historical returns of the MSCI World Index, including reinvested dividends. Actual returns vary, and past performance is not a guarantee of future results.

Nobody decides to end up as the second woman. It happens one reasonable decision at a time, which is exactly why it goes unnoticed.

Enjoy what you've earned, by all means. Just know the percentage that stays, because that number will shape your future far more than your job title will.

2. Your tax leak

Suppose you've just been promoted from £100,000 to £120,000.

Once your adjusted net income exceeds £100,000, your Personal Allowance is gradually withdrawn, disappearing entirely at £125,140. In England, Wales and Northern Ireland that creates an effective 60% marginal income tax rate across the band.

Of your extra £20,000, you could keep just £8,000 before National Insurance.

If a finance director brought that number to a board meeting, somebody would ask what was being done about it.

Now run it the other way. For someone whose adjusted net income is £120,000, a £20,000 gross pension contribution could bring it back to £100,000 and restore their Personal Allowance.

Assuming full tax relief is available, the whole £20,000 goes into the pension, yet it costs her only around £8,000 in take home pay. Take that £20,000 as salary instead and she keeps £8,000.

Same £20,000. Either £8,000 in your account, or £20,000 in your pension.

Then give both amounts time. At 9% a year, compounded monthly, £20,000 in the pension could be worth around £49,000 in ten years. The £8,000, invested in an ISA at the same rate, could be worth around £19,600.

Pension withdrawals are generally subject to income tax, although up to 25% can usually be taken tax free, subject to applicable limits. ISA withdrawals are generally tax free, so the two pots aren't directly comparable, but the advantage of upfront pension tax relief is clear.

A pension locks money away until later life, so it has to fit your wider financial plan, and contribution limits and individual circumstances matter. But I would want to know why that option had never been examined, particularly with income tax thresholds frozen until 2031 and the latest Budget leaving this trap in place.

I've broken down exactly how the trap works, including its impact on childcare support, in The £100k Tax Trap: Why Earning More Can Leave You With Less.

Source: HMRC, Income Tax rates and Personal Allowances

3. Your idle assets

Perhaps you have £50,000 or £100,000 in savings because you're unsure whether to invest.

Cash has a proper job to do, covering emergencies and anything you'll need in the next few years. Beyond that, ask what it is being paid.

The latest Budget has made this question sharper. From April 2027, the higher rate of tax on savings income is due to increase to 44%.

Consider someone holding £100,000 outside an ISA and earning 4% interest, which is £4,000 a year. If she's a higher rate taxpayer entitled to the full £500 Personal Savings Allowance, £3,500 would be taxable. At 44%, the tax would be £1,540, leaving £2,460.

That's a return of less than 2.5%, before inflation has taken its share.

Investing carries real risk and markets can fall hard. Cash carries a risk too, and it is the quieter kind, because your statement never shows the purchasing power you've lost.

You may not want to invest every spare pound. But you do need to know how much cash you genuinely require and whether the rest could be working harder.

Source: House of Commons Library, Autumn Budget 2026: A summary

4. Your forgotten subsidiaries

Every employer you've left may have left you a pension.

No sensible owner would run a group of companies without knowing what each one held, what it cost or how it was invested. Yet research from the Pensions Policy Institute estimates that around three million UK pension pots, containing at least £18.7 billion in assets, have lost contact with their owners.

If you think one of them might be yours, the government's free Pension Tracing Service can help you find the contact details.

For women, this matters even more. According to Department for Work and Pensions figures for 2020 to 2022, among people aged 55 to 59 with private pension wealth:

Women's median pension wealth was around £81,000. Men's was £156,000.

The gap was 22% among those aged 25 to 29 and reached 52% among those aged 45 to 49.

Differences in earnings, career breaks, part time working and caring responsibilities all feed into those numbers. The years spent looking after everybody else can be expensive ones for a pension, and the impact may not become apparent until much later.

This is why I work with women over 40. There is still time to improve your position, but only if you understand what you already hold.

Sources: Department for Work and Pensions, Gender Pensions Gap 2020 to 2022 | Pensions Policy Institute research, reported by European Pensions

5. Your key person risk

Any serious investor asks what happens if the founder can no longer run the business.

In your business, there may be one main income stream and one key person. Redundancy, illness, a parent who needs you, or simply reaching the point where you cannot do it any more, and the revenue stops.

Assets, appropriate financial protection and a well considered plan can reduce that dependence. They also give you choices: to leave a job that has stopped making you happy, to work three days instead of five, to retire when you're ready rather than when somebody else says you can.

I left investment banking last year after more than 25 years. I could make that decision on my own terms because I had spent years building assets that didn't depend on my salary.

Your homework tonight

Take one sheet of paper. Add up your savings, investments, pensions and property, then subtract what you owe.

That's your net worth, and you probably know your salary far better than you know that number.

Next, work out what percentage of last year's income ended up in assets you still own.

Finally, write down what you want all of this to pay for. Perhaps it's retiring at 55, working three days a week, starting something of your own or simply knowing that you could stop working if you needed to.

Knowing those three answers is what I call being Wealth Intelligent. You don't need to follow the markets every day. You need to manage your own money with the same rigour you bring to your work.

You would never sign off a set of accounts you hadn't read. You may have been signing off your own for years.

Let's Look at Your Financial Position

If you've worked out your net worth but aren't sure what it's telling you, bring it to a free 20 minute Wealth Strategy Call. We'll talk through your financial goals and the areas worth reviewing first.

Book Your Free Wealth Strategy Call

I publish a new article every two weeks on investing, pensions and building long term wealth. Follow me here for the next one, or read more at Wealth with Fahmida Insights.

This article is for educational purposes only and does not constitute personalised financial, tax or investment advice. I am not a regulated financial adviser. Investment projections use a 9% nominal annual growth assumption, compounded monthly, based on the approximate long-term historical returns of the MSCI World Index, including reinvested dividends. Historical performance does not predict future returns. Figures exclude fees, charges, inflation and taxes. Investments can fall as well as rise in value and you may get back less than you put in. Tax examples use England, Wales and Northern Ireland income tax rates, excluding National Insurance unless stated. Scottish rates differ. Pension tax relief depends on individual circumstances and applicable limits. Pension withdrawals are generally subject to income tax, although up to 25% can usually be taken tax free, subject to applicable limits. The savings example uses the announced April 2027 rate and assumes the full £500 Personal Savings Allowance is available. Tax rules may change.