Jul 30, 20212 min read

How did Elon Musk Make His Money?

How did Elon Musk Get Rich?

Elon Musk made his money through innovation, solving challenging problems and taking risks. Early, Elon was not afraid to push the limits by starting several ambitious ventures whilst being shunned by peers and media in his early career. He’s primarily known for his pioneering attitude in sustainable transport (Tesla) and seeking new planets (SpaceX) -- Elon is currently the 2nd richest person to exist. [1]

Learn where Elon Musk generated his wealth, his rankings versus Jeff Bezos, and the critical points for investors.

Where did Elon Musk Get His Money?

Elon Musk, alongside his sibling (Kimbal Musk) and Greg Kouri, founded Zip2, an online software company, in 1995. Zip2 became the origins of a lot of Elon’s wealth we see today. He took immeasurable risks and re-invested nearly all of his profits when selling the company in 1999 for $307 million, leaving Elon with 22 million USD for his 7% shareholding. Elon officially became a self-made millionaire.

This initial venture, funded by angel investors, gave Elon enough capital to pursue X.com (now part of PayPal), which was later acquired by eBay in 2002, giving Elon another massive payout of 165 million USD on his shareholding. His huge risk paid off, increasing his net worth by over five times.

Being the thrill-seeking risk-taker, Elon decided to use his millions to find ways to make life on Mars sustainable. Enter, SpaceX; Founded in May 2002, he still holds the title of CEO, seeking to reach his goal.

In 2012, Elon got his first mention on the Forbes billionaire list with a net worth of around 2 billion USD, which compounded with his investment in Tesla, producing electric cars, batteries and renewable energy sources. Tesla and his other ventures like neural link, the Boring Company, and OpenAI pushed Elon’s net worth to over 151 billion USD in 2021.[2]

Contrary to popular belief, Elon does not have his money as cash. He’s known for always having it tied up in investment ventures, with little regard for worldly possessions.

Is Elon Musk Richer than Jeff Bezos?

Elon Musk, although very rich, is not richer than Jeff Bezos. Elon is worth 151 billion USD, whereas Bezos is worth 177 billion USD, holding the lead by 26 billion USD as of July 30, 2021.

What It Means for Retail Investors

Elon Musk currently holds the title of the second wealthiest individual globally, with nearly all of his wealth attributed to his grit, tenacity, and taste for risk. As a retail investor, the main lessons to learn from Elon’s journey are solving complex problems and taking risks.

When taking those risks, just make sure to measure the potential upside versus downside - if things go wrong, always try to cut losses short.