For most of us, reaching billionaire status feels like a pipe dream reserved for the Elon Musks and Jeff Bezoses of the world. But one man passionately believes anyone can be one.

The only catch is that you may not be around to reap the rewards – but your children and grandchildren will. Tim Taubman – a former banker – believes that, with the right strategy, anyone can accrue an incredible level of wealth for the next generation. Investing as little as £50 a month can make your grandchildren billionaires, he claims.

Since the beginning of 2024, he’s been sharing his research portfolio on his blog, The Crazy Plan. The idea came a few years ago when he started to plan ahead for his family’s finances and consider the legacy he wants to leave behind. He decided to track how quickly two investment plans could reach $1billion (£733million).

He says his fictional portfolio has amassed £22,929 in the past two years and he expects it to hit the billion mark in as little as 76 years and five months. Aged 55, Tim would be 131 years old when he became a billionaire, if he followed the plan himself.

Wealth & Personal Finance put his theory under the microscope.

Road to a billion

Tim has been a private investor since 2010 and believes in the power of long-term investing. ‘Having that headline figure makes people realise that opportunity is there. It’s about setting yourself and your family up for future generations,’ he says.

Even if you don’t manage to build a billion pot and can’t quite face handing over all of your money to the next generation, you can still amass millions with relatively modest amounts of savings. ‘I want people to realise they can set out on a journey to wealth – for some that might be building a £5,000 pot, for others it might turn into millions.’

Tim Taubman says his fictional portfolio has amassed £22,929 in the past two years

Tim believes that, with the right strategy, anyone can accrue an incredible level of wealth for the next generation

Tim has devised two different strategies to reach a billion goal, which he aptly calls ‘Crazy Plans’ – the lump sum plan and the monthly plan. The lump sum option involves investing £10,000 on day one and letting it grow. The monthly plan is for those who do not have a lump sum but can make regular savings of £50 a month over a ten-year period. The aim for both is simple – get to a billion.

To do this he ‘invests’ the fictional money into his Crazy Fund, a unit fund currently consisting of ten different investments.

How long will it take to get there?

At the beginning of his experiment, calculations showed the lump sum plan would take 79 years and 11 months to hit the billion mark. The monthly investment plan would take 89 years and three months. This means that someone who starts aged 25 today could reach a billion by 104 (if they live that long).

But you would need to make a large return to hit this target. Tim’s calculations assume an annualised return of 15 per cent – highly ambitious. You would need to be aggressive in your investing strategy and have a high tolerance for risk to hit this target.

By comparison, the FTSE World Index has returned 9.64 per cent in annualised return over the past 22 years. If we take an even longer-term view, given how long the money will need to remain invested, Swiss bank UBS’s annual Global Investment Returns Yearbook, which analyses market data going back to 1900, estimates average annual real returns from global stocks to be around 5 per cent a year over that period.

Others say Tim's calculations, which assume an annualised return of 15 per cent, are highly ambitious and perhaps unrealistic

If you secured a 10 per cent average annualised return, your £10,000 would instead reach £21.1million after 80 years under Tim’s plan. When we put Tim’s theory to Charlotte Kennedy, a financial planner at Rathbones, she said: ‘Compound growth is incredibly powerful over very long periods and, given enough time, even relatively modest sums can grow into very large amounts.’

However, she cautioned that the target of 15 per cent return was high for most investors and may be hard to achieve. She said: ‘While some have achieved returns at this level over long periods, it is significantly higher than those that many investors would expect.’

Realistic target?

If your priority is building wealth for later life, instead of leaving masses of money to your grandchildren, the timescales are much more appealing.

Take a 25-year-old who begins to follow the monthly plan. By age 65 they’ll have built a $1.1million (£806,000) pot, assuming this level of return. If they have £10,000 to invest now, then they’ll have $3.8million (£2.79million) for their retirement, in addition to any pension savings.

Tim spends his days investing and fine-tuning his portfolio, and says it has outpaced his ambitious 15 per cent compounding return target. The returns have been an impressive 27 per cent each year.

He’s now expecting to hit the billion mark in another 76 years and one month on the lump sum plan while for the monthly plan it’s 86 years and one month. This also factors in fees. Tim’s portfolio contains a mixture of investment trusts and ETFs (exchange-traded funds) which track the performance of a specific stock market. He was once a big fan of investing in single stocks, but has switched to funds in the past years as stock picking is ‘really hard work’ and requires a lot of research.

Picking winning stocks can be risky as just one poor performer can dent your overall returns.

The portfolio is focused on growth, rather than income, as there is a large exposure to US and technology stocks. Growth-focused funds target companies expected to grow faster than the rest of the market, although this can come with higher volatility.

His investments include some of the most popular funds among UK investors, holding Allianz Technology and Scottish Mortgage. Scottish Mortgage has returned 135.1 per cent over the past three years, and its top holdings include Space X and TikTok owner ByteDance. Allianz Technology has returned an astonishing 183.9 per cent in three years with holdings including chipmaker Nvidia. He admits his portfolio is tech-heavy and says that could change over time if another sector began to perform consistently well.

But he says investors should look at technology returns over a long period of time. ‘Look at the Polar Capital Technology trust. You can go back 30 years and see the returns. People tend to look too short term when they look at technology.’

Could you do it?

In theory, if you achieve 15 per cent return each year and never touch the money, you can build large reserves of wealth and reach the billion mark.

But, in reality, investors who don’t have the expertise may struggle to meet this level of return year in, year out.

You also need to be comfortable never spending that money. Instead, your children and grandchildren will get to enjoy the spoils. You could focus on growing your pot to several million and access it early. But you’ll still need to leave it alone for several decades if you want it to grow substantially.