As the new year dawns, Britons are setting familiar goals: hitting the gym, reading more, or attempting a dry January. Yet one of the most valuable resolutions – building serious savings – is often overlooked, with around one in three adults having less than £1,000 put away.
The Power of Small, Regular Savings
Shockingly, data from the Financial Conduct Authority (FCA) reveals that a third of UK adults have either no savings or less than £1,000 in cash, leaving them financially vulnerable. However, even small, consistent efforts can yield significant results. For instance, digital bank Monzo's annual '1p savings challenge', where you increase your daily deposit by a penny each day, can generate nearly £700 in a single year.
But what if your ambitions were far greater? What if your New Year's resolution was to become a billionaire? While it may sound like a fantasy, one investor is proving that with discipline and a long-term view, it might not be as far-fetched as it seems.
Inside 'The Crazy Plan' for Billionaire Status
Former PwC accountant and Credit Suisse derivatives trader Tim Taubman has dedicated himself to a unique mission. He has quit his day job to focus entirely on what he calls 'The Crazy Plan': building a personal investment portfolio worth £1 billion through regular monthly contributions.
Taubman's strategy hinges on achieving an ambitious average annual return of around 15 per cent from a carefully selected portfolio of equities. At this rate, the maths becomes compelling. A monthly contribution of just £50 – less than £2 a day – could theoretically grow to £1 billion in 87 years. For those wanting to accelerate the timeline, a daily investment of £30 would take 64 years, while £150 daily could see the goal reached in 53 years.
'The upshot is you really don't have to have a £1 million income to aim for billionaire status,' Taubman notes. 'A little goes a long way.' He acknowledges the multi-generational aspect of such a plan, hoping to pass the portfolio on to future heirs.
Avoiding Common Pitfalls for New Investors
For ordinary Britons inspired to start their own wealth-building journey, Taubman highlights critical mistakes to avoid. Firstly, not having a plan. 'Your plan will evolve but if you don't have one you are like a ship without a rudder,' he warns. A simple plan could involve saving 10% of income monthly and investing in a broad stock market fund.
Secondly, the lure of picking single stocks. Taubman cautions that this is high-risk even for professionals and is often fuelled by social media hype. A more reliable strategy is using diversified funds.
Thirdly, underestimating the need for a long-term perspective. Building substantial wealth takes decades, with no shortcuts. Investors must be psychologically prepared for market downturns, which can see values drop by 30% or more.
Taubman also points to modern challenges like the constant bombardment of advertising and the curated lifestyles on social media, which normalise excessive consumption and make saving harder. 'Wealth is a choice,' he states, 'you either consume now or you choose to create a bright financial future.'
Will Government Campaigns Foster an Investing Culture?
With the Chancellor set to launch a new 'Tell Sid'-style campaign to encourage stock market investment, Taubman is supportive but highlights hurdles. He stresses that simply telling people to invest without education on the 'why' may not work. Furthermore, any campaign must be permanent, starting with financial education in schools, to counteract the decades-long process of wealth building.
He also identifies a conflicting message from government policy, where increases in taxes on capital gains, dividends, and interest can penalise those who save and invest. 'Tax policy should support people becoming financially independent but it does the opposite,' he argues.
Despite the challenges, the core message for 2025 is clear: bypass the short-lived gym membership resolution. Instead, consider a financial goal. Whether it's saving your first £1,000 or embarking on a decades-long investment plan, taking that first step is the most valuable resolution you can make.
