| Name: | Elon Musk |
| Net Worth: | $296.2 Billion |
| Salary: | $0 |
| Date of Birth: | June 28, 1971 |
| Gender: | Male |
| Profession: | Entrepreneur |
| Citizenship: | American, Canadian, South African |
The net worth of rich people is always a point of fascination for everyone. The common question is, “how much do the ultra-rich own?”. Therefore, it is no surprise that people are highly interested in the net worth of Elon Musk, the second richest person on the planet with an estimated net worth of 296.2 billion USD as of November 2021. Briefly, Elon also held the title of the richest person on Earth when his net worth exceeded that of Jeff Bezos, the founder of Amazon, in early 2021. So, what exactly makes up this huge net worth of Elon? This article will cover these details, including:
- Elon Musk in a Nutshell
- The Initial Venture with PayPal
- The Tesla Triumph
- 2021: The Year Musk Became the Richest on the Planet
- What Makes Musk Rich?
- Cash Poor
- What’s Next for Elon Musk
Elon Musk in a Nutshell
Most people know Elon for his revolutionary ideas in transportation, technology, and space travel. His work is focused on advancing humanity towards new horizons. Currently, his net worth is much higher than the estimate for several reasons. For example, he pledged that more than half of his 23% stake in Tesla would be used as collateral for loans. Therefore, Forbes has reduced the estimated amount from his net worth.
Similarly, he had to step down as Tesla chairman back in 2018 after an alleged controversy over his statement. Another major source of his wealth is Space X, the firm working towards the first human steps on Mars. Recently, Space X has been valued at 74 billion USD after it completed its recent fundraising round in February 2021. Musk belongs to humble roots, coming into the US as an immigrant from South Africa at 17 years old.
The Initial Venture with PayPal
Many people are unaware that Elon Musk was one of the company’s founders that eventually became PayPal, the global payment giant used worldwide today. Elon made his first million in 2002 when eBay purchased PayPal, leaving Musk with a staggering 165 million USD. However, Musk didn’t make it to the list of the richest people as late as early 2020. His net worth was at 27 billion USD during the early months of that year. However, things changed massively as the year progressed.
The Tesla Triumph
In 2020, Elon saw his net worth increase from a mere 27 billion USD to a whopping 150 billion USD, placing him amongst some of the richest people on Earth. The immense growth of Tesla fueled such a massive increase; the transportation company focused on electric vehicles. Musk owned around 20% of Tesla’s stock during the year. However, 2020 could also be labeled as the most volatile year for Musk’s net worth.
For example, during September 2020, the Tesla stock took a huge hit, which caused something unprecedented in the Bloomberg Billionaire Index: Musk faced a drop in his net worth of approximately 16.3 billion USD. To date, this drop has been the highest in a single day ever for any billionaire. However, just two months later, Musk surpassed even Mark Zuckerberg due to an increase in Tesla’s stock, making him the third-richest person on the planet. Wait! The irony doesn’t end here1 Go ahead by a week, and Musk’s net worth surpassed the Richie-rich, Bill Gate, to become the second richest person on the planet. The interesting part here is how Bill Gates’ software company, Microsoft, has been operating for much longer than Musk’s prime venture: Tesla and SpaceX.
2021: The Year Musk Became the Richest on the Planet
If 2020 was Musk’s growth year, 2021 has certainly been the pinnacle of his success. It was in January 2021 that Musk’s net worth grew to 185 billion USD. This figure placed him higher than Jeff Bezos, the founder of Amazon, making him the richest person on the planet. However, irony struck again when the volatility of Musk’s stock plummeted his wealth to the second spot again in February 2021. On 27th September 2021, after a massive increase in Tesla’s stock, Musk again became the richest person on Earth with a staggering net worth of over 200 billion USD. Finally, Musk set a World Record by being the first person in known and recorded history to have a net worth exceeding the USD value of 300 billion. However, since he pledged to use a large part of his shares to finance loans, Musk’s net worth has fallen back to 296 billion USD. Only time can tell how high his net worth would go with the increase in the value of his companies.
What Makes Musk Rich?
Tesla is the main driver of his net worth. If Tesla were to plummet today, more than ¾ of Musk’s wealth would be at stake.
Currently, Musk receives no fixed salary from Tesla. Instead, the board of directors agreed with Elon in 2018 that his compensation plan would be linked directly to Tesla’s success, revenue, and valuation. If the stock of Tesla falls below the required market value, Musk will receive no compensation. In reality, however, it is very unlikely given how Tesla has been growing massively over the past few years. To date, such a commitment between the board and the CEO has never been this expensive for the company.
The first award was given in May 2020, where Musk was eligible to buy 1.69 million of the company’s shares at a reduced price than the market value. On an estimate, this increased his net worth by 800 million. Additionally, his percentage of company ownership increased by approximately 1 percent as well.
Cash Poor
Reportedly, the occasionally richest guy on the planet has termed himself as the “cash poor.” Musk states that he has no interest in physical and material belongings. Instead, his focus is to advance humankind, where his companies would act as a catalyst in essential and impending human development processes. For example, he sighed The Giving Pledge in 2012, where most top-billionaires pledge to give away a significant part of their wealth for charitable and noble causes. Similarly, in May 2020, he promised to sell most of his physical possessions.
Musk stood by his word when he sold most of the houses/ mansions he has owned in the past and shifted in a humble housing near his launch facility.
However, while promoting electric travel, he uses a private jet that uses a lot of fossil fuels. Therefore, he has been the target of some criticism over his lifestyle as well.
What’s Next for Elon Musk?
Currently, Musk’s net worth is closely tied to Tesla and its success. One rational step for Musk would be to focus on his other ventures as well. For example, if SpaceX grows massively after a breakthrough in space travel, Musk will likely see his wealth double, given his massive shareholdings in the SpaceX company. Similarly, currently, smaller projects such as the Starlink internet system have great potential for monetary success. If such projects grow in the future, Musk can cement his place as the unbeatable richest person on Earth.
Let time decide how Musk’s net worth grows. In the meantime, please take out a few moments to share your views about our article. Subscribe for more informational content!