Mr Musk is now worth $ 281.6 billion (Â£ 210 billion), but life hasn’t always been gold for the extraordinary entrepreneur. Here is how he made his fortune and why he now claims to be “poor in money”.
This was the first time Mr Musk had to manage such a large amount of personal wealth, and although he earned a substantial $ 22million (around Â£ 16million) from the sale, he was still majority shareholder in the company that would become PayPal.
This is the key element that has helped Mr. Musk build such immense net worth in a relatively short period of time.
By holding stocks instead of withdrawing money to reap the full benefits of his hard work, Mr. Musk was able to increase his wealth eightfold when eBay bought PayPal.
When he stepped into that bonanza, Mr. Musk created SpaceX, Tesla, and SolarCity in quick succession over a few years.
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His success and his continued investment in them would make him the richest man in the world.
In 2010, Tesla shares soared in 2010, taking Mr. Musk’s wealth with them.
Mr Musk first appeared on Forbes’ Rich List in 2012 with a meager net worth of $ 2 billion (around Â£ 1.4 billion) compared to his current wealth.
But what are the richest people in the world really doing with their wealth? The rather surprising answer for most is nothing, frugal lifestyles and investments often mean that the rich end up running out of money.
This is often referred to as the reason the rich stay rich; their impeccable money management skills keep them from spending their money faster than they can.
By continually investing and saving as much as possible, their high net worth often does not translate into such an amount on hand.
Mr Musk claimed he was short of cash as he relied on credit for most of his daily expenses with most of his money tied up.
âSome people think I have a lot of money, in fact I don’t,â Mr. Musk told investor Cathie Wood on a podcast last year.
Although being poor in money may seem worrying to some, the majority of the richest 1% are deliberately poor in money.
As an entrepreneur, Mr. Musk has spent most of his career putting everything into his businesses, including giving up his paycheck.
This apparently would not have changed, as in 2020 Tesla cut Mr Musks’ salary to zero as he continued to deny his minimum CEO salary.
Instead, Mr. Musk is given stock options when Tesla’s value drops, so when she recovers, so does her wealth.
The multi-billionaire also owns a significant amount of real estate, with a total cost of over $ 100million (around Â£ 74million), earning him passive income.
With the limited cash on hand, Mr. Musk has an affinity for cars, owning a few Tesla, Jaguar, McLaren, Audi, BMW and Porsche vehicles and having even purchased the Lotus Esprit submarine used in a James Bond film. for $ 920,000 (approx. Â£ 687,010).
The father of six also tries to give the best of himself to his children, saying, âI have the kids just over half the week and spend a lot of time with them. I also take them with me when I go out of town. “