Elon Musk is the founder, CEO, and chief engineer/designer of SpaceX and co-founder, CEO, and product architect of Tesla, Inc. He is widely considered one of the most influential entrepreneurs in the world and the public face of the 21st-century tech boom. Despite his accomplishments, his greatest success may be measured in the massive wealth amassed. Elon Musk’s wealth has been estimated to stand at around $154 billion and he has garnered much attention from the press, financial analysts and the general public alike with regards to his rapidly expanding fortune. Where does this man, who is also the second-richest person in the world behind Jeff Bezos, make most of his staggering wealth?
The primary source of Elon Musk’s wealth comes from his stake in Tesla, which is estimated to be worth around $151 billion making up 98% of his wealth. As the CEO, CTO and founder of the car manufacturer, Musk is an integral part of the company and owns more than 20 per cent of Tesla’s stock. An additional source of income comes from a significant stake in the SpaceX Company valued at $2.5 billion making up the remaining 2 per cent of his wealth. As the founder, CEO and lead designer of SpaceX, Musk is heavily involved in his most ambitious project yet, Mars exploration. In a recent SEC filing, it was confirmed that Musk was paid $595,908 in 2019 in annual salary, however this accounted for an extremely small slice of his overall wealth.
Musk’s wealth growth has also taken a dramatic climb since October of 2020, when his net worth increased from $27.7 billion to $128 billion in less than eight months. This is most likely due to the unprecedented rise in Tesla’s stock price during that same period. Since Tesla went public in 2010, its stock has risen astronomically by over 1,000 percent. Tesla’s valuation and stock prices have seen explosive growth, up from an initial public offering (IPO) price of $17 per share in 2010, to a closing price of $469 on January 8, 2021. Most of Musk’s wealth is derived from the number of shares he holds in Tesla and the success of the company has allowed his wealth to grow higher and higher.
Financial analysts attribute the growth in Tesla’s stock price to the company’s continuous release of more technologically advanced vehicles along with the increasing demand for Tesla’s environmentally friendly, luxury vehicles. Musk’s ambitious road map for the company, which includes the expansion of the Supercharger Network, aims to make Tesla’s cars accessible to a wider population thus opening up the possibility of more sales. Additionally, the aformentioned video game like autopilot feature, in Musk’s cars has been seen as a major draw for current and prospective Tesla owners.
Most recently, Musk has also been able to add hundreds of millions of dollars to his wealth from the sale of his compensation in the form of shares from Tesla. Musk, in a very typical show of ambition and leadership, has recently announced his intention of selling off sizable portions of his holdings to boost funding of venture capital efforts so that he can accelerate the development of clean energy and transport technologies.
Options
Despite the majority of his wealth being tied up in Tesla, Elon Musk does have other options. Musk has shown a lot of interest in cryptocurrencies and, as the CEO of Tesla, one of the company’s recent moves has been an investment into Bitcoin. It has been reported that the company bought $1.5 billion in the cryptocurrency, and Musk himself has been investing in cryptocurrency for years. Additionally, Musk is currently playing an active role in the exploration of space. As the owners of both Tesla and SpaceX and advised to focus on this particular multimillion dollar venture, there is no doubt that Musk’s wealth is set to grow even more.
SpaceX
Space Exploration Technologies Corporation (SpaceX) is an aerospace manufacturer and space transportation services company founded in 2002 by Elon Musk. Musk initially envisioned the company to reduce the cost and increase the reliability of space exploration and the reusability of spacecraft. SpaceX has since become the most powerful rocket developed and has accomplished monumental feats such as transporting people to space and launching the world’s most powerful operational rocket. SpaceX is currently valued at $200 billion and much of this success is attributed to Musk’s leadership and involvement.
Given the business model and the importance that crew costs account for in the development of the working costs of the rockets, SpaceX is far from reaching stability. However, the successful launches and Tesla’s persistence in the industries of electric cars and energy storage has made the world look up to Musk’s innovations positively. SpaceX’s stock prices have also been on the upward trend for the major part of the last decade, increasing Musk’s wealth in the process. Thus, SpaceX is also expected to be a major source of revenue for Musk in the coming years.
Hobbies
Elon Musk is an avid collector classical music records, spending more than $100,000 each year on the hobby. He has collected over a 1000 records, comprised of some of the most iconic classical music of the era. Musk’s favorite pieces include those composed by Brahms, Chopin and Bach.
Musk also frequents auctions in order to obtain rare pieces and has opted to store all his vinyl in a special room of his Los Angeles home – removed from the rest of the house. A former engineer of SpaceX explained in an interview that Musk’s attention to classical music was to the point that some SpaceX rocket components were designed with selected pieces from his collection playing in the background.
In addition to classical music, Musk has also invested in the modern art world, spending millions of dollars to acquire pieces. Musk’s favorite artist is the American painter Jean-Michel Basquiat. With an estimated net worth of $110 million, it’s not surprising that he can afford to purchase these expensive pieces of art. This is a hobby Musk has taken seriously, with his collection valued in the millions and often being seen in his homes or at parties with friends.
Philanthropy
In the past few years, Elon Musk has become a major player in philanthropy. Musk established the Musk Foundation in 2002 to provide grants to research and education projects. As of 2018, the Musk Foundation had donated more than $15 million in grants to organizations in the Cities of Los Angeles, Paris, Edinburgh and Pok Fu Lam, among many others. The organizations receiving grants focus on health, education, science and engineering.
Musk has also donated to many charitable causes, including helping victims of natural disasters. In 2018, Musk donated $480,000 to the Austin Children’s Shelter and was actively involved in the rebuilding of homes for the victims of the 2015 earthquake in Nepal. He also donated $250,000 to the families of the victims of the 2012 shooting at Sandy Hook Elementary School in Newtown, Connecticut.
Musk is also an active participant in the fight against climate change, having invested millions of dollars in research and development of clean energy technology. Recently, he donated $1 million to the center for Progressive Reform, an organization advocating for the protection of natural resources and climate change policy.
Conclusion
Elon Musk has become one of the most influential entrepreneurs of the 21st century thanks to his wealth, ambition and innovative thinking. His primary source of income comes from the majority share he holds in Tesla, Inc., a company whose stock and valuation have seen explosive growth since 2010. Additionally, Musk’s holdings in SpaceX and his income from his salary from the company, as well as his philanthropy, has added to his fast-growing wealth. Finally, his private investments in classical music, art and cryptocurrency have also added to his growing list of sources of income.
