Why I’m NOT Investing My Work Bonus

Añadido: 2026-05-25

[00:00:00]So I just received my annual bonus from work. It was a total of £2,693 and 69 p, but I decided to do absolutely nothing with it for the time being. Now I can already sense you thinking, "Isn't this a personal finance YouTube channel, Stef, or shouldn't you be investing it in a really tax-efficient way that's going to mean that you retire next year or you've got a Lambo on the drive or something?" Now I'm guessing if you're watching this video then you probably watch all the personal finance YouTube videos as well, and therefore you might have seen the same ones that I do in the They say things like invest it immediately, optimize the tax, maximize your pension, buy assets, make your money work for you, all those kinds of buzzwords. And those are really good for the YouTube algorithm, and they might be good in themselves, but I'm not particularly bothered about that that side of it. I'm focusing on trying to show you the real human side to the early stage of my stock investing journey, having started at the beginning of 2025 in my mid-30s. And since then I've been working on many things, both numbers-wise and behavior-wise and habits-wise as well. And over that time I've recognized more and more that sometimes there is a real value in just pausing for a period of time, just doing nothing except think, especially when you might feel that life is a little bit messy or financially a little bit complicated. And one thing that's been messy in my life is my buy-to-let property. It's been a bit of a saga for the last 6 months or so. It's been empty, so that's been costing me a fair bit of money to keep running and to do some renovations. There's still some uncertainty around whether I can get a tenant in there anytime sooner or not, but I'll update you soon. So instead of like rushing to optimize every pound immediately, I'm actually leaning more towards just increasing my cash reserves a little bit. And honestly, I think that's a massively underrated financial behavior. Now nothing I say in this video should be considered financial advice for yourself. I'm just sharing my own journey and my own decisions, so please do make sure that you do your own research if you're thinking about what to do with your own hard-earned money. I I I just wish that more people were transparent about these sorts of financial decisions online. So, here's mine. I'm doing it myself. So, the gross bonus amount was just over £2,600, which sounds great initially. I'm certainly very, very grateful, and I know that many people will never see a bonus like that. Sure, I work hard for it, but I know that other people work really hard, too. So, I'm absolutely not expecting you to get your tiny little violins out for me on this one. I do pay higher rate tax. So, unfortunately, it might feel like it was a £2,600 bonus, but in reality, the take-home pay was closer to £1,500.

[00:02:26]And I think this is one of those weird psychological things about earning in the higher rate tax band in the UK.

[00:02:32]Every financial decision suddenly becomes like an optimization discussion.

[00:02:36]You stop thinking, "Oh, great. Extra money, and a little bit comes off the top." And you start thinking, "Ah, what's the most efficient way I can do with this because of all the deductions on it?" And honestly, I'm not convinced that that mindset is healthy and is positive way to think about money. It feels like it just puts pressure on something that should just be a positive experience. I should just get it, take Mrs. Compounding Project out for a meal or something, and that's it. But it's like there's there's this whole thought process behind it. Now, I think probably one of the most obvious things to do with this if I didn't require the money would be to salary sacrifice into my pension scheme. Now, from a pure like tax efficiency purpose, that probably is the mathematically optimal answer. But personal finance is not just mathematics. There's a lot more to it.

[00:03:18]At least just for me there is anyway.

[00:03:20]So, there's a few reasons why I'm not rushing to do that. Firstly, my pension pot already has significantly more money in it than my stocks and shares ISA. So, 73K versus 21-22K. And that's just because I've been paying into it for many years. I currently contribute 5% of my salary. My employer contributes 10%.

[00:03:37]That's the maximum employer contribution, so I'm not motivated to put much more than that in there. I have also recently moved my pension pot into a 100% global equity fund. So, over time, that pension's grown pretty well this year already. But the issue for me is is that all of that money is locked away until later life, so 68 or higher by the time I get there. And one of the things I care more about right now is building earlier life options. So, I don't necessarily want all of my wealth trapped behind pension age, especially when I'm trying to grow this YouTube channel into a thing. I'm trying to potentially reduce work stress long-term, have options, you know, later in my life, create more flexibility in my 40s and 50s perhaps. And that's where the ISA becomes really important for me.

[00:04:19]Because I can access it whenever I like.

[00:04:21]And the second reason I'm not panicking about this is because I can still adjust these things later. I think sometimes finance content creates this feeling that if you don't optimize every decision instantly, then you failed financially. But it is May 2026 at the time of recording. I can still increase my salary sacrifice into my employer pension scheme this tax year if I decide to. So, I can change my contributions through making additional voluntary contributions all the way until May 2027. So, if I wanted to reduce my tax liability on that payment, I could just increase my AVCs later this year and still benefit from those tax savings.

[00:04:55]So, I know that delaying that does potentially does reduce the amount of time the money will have been invested for, so potentially reduce the gains.

[00:05:03]But the fact of the matter is the decision doesn't have to be made today.

[00:05:08]And I really do think that slowing financial decisions down is massively underrated. If I look back at decisions I've made in the past, the ones that I have rushed or made like emotionally, when I've looked back, they're not the best decisions. And I know there's likely a balance to be struck there somewhere. Like obviously don't put things off forever and never get round to doing them. But I do think just hitting pause for a moment is okay in my opinion. I do think that personal finance YouTube massively underestimates the emotional value of cash. Because yes, technically I could invest this immediately into my pension, optimize the tax, maximize those long-term returns. But life doesn't happen just within a spreadsheet. The buy-to-let has cost me money recently. Life has been hella expensive, as we know a a lot.

[00:05:51]There's uncertainty around me finding a tenant, so I've just got all those things on my mind. So, to be honest, putting this like bonus interest into my emergency fund and increasing my financial buffer a bit genuinely reduces my stress. So, I think that has a real value, too. Having a greater cash reserve gives you more breathing room, more flexibility, more time, a lower level of panic, and a lower level of stress, or I find anyway.

[00:06:15]And I think that those things matter more than you might find when you're looking for investment things on the internet. So, one of my long-term goals right now isn't really becoming rich in the financial sense and having a big number on a bit of paper. It's more about becoming rich in the life sense, so having more flexibility in life. So, I think that that's one of my biggest mindset shifts I've had in my 30s. In my 20s, I might have felt the pressure to, right, if I'm going to do something, I've got to optimize it all, got to chase returns, or constantly maximize how much I spend, what I buy, or what I invest in, or how much fun I'm having, or the holiday I'm going on, all those things. But now, I just really value the options. So, having options, having flexibility, lower stress, being consistent, like I value those things much more highly nowadays. And I think that those, like, quite frankly, boring behaviors are probably what help people build wealth long-term, as I've spoken to people in that situation. No flashy decisions, just patience, consistency, not panicking, not rushing, just building buffers, acting sensibly, and making like thoughtful decisions you've taken time over. That probably doesn't make for the most exciting finance content on YouTube, I know, but I do think it's realistic. So, no, I'm probably not going to rush to invest this bonus immediately. I'm probably not going to try and buy anything exciting, either. I might take Mrs. Compounding Project out for a nice meal, but and part of me feels guilty for saying this on a finance channel, but most of it is going to go into what is actually a relatively low interest savings account.

[00:07:42]However, I do reiterate that if I'm trying to build a life where I can feel financially calm, doing that has value, too. And right now, for me personally, having slightly more cash, slightly more flexibility, slightly less stress, actually feels like the right financial decision, or the right life decision for me, at the very least. If you'd like to follow on with more of my real financial journey as I just try and figure this stuff out as I go along, to be honest, I'd be very grateful if you were to hit that subscribe button. Thank you very much for watching, and I'll see you in the next one.