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How Did Elon Musk Make His Cash?


Elon Musk, South African native son of Maye and Errol Musk, is the world’s richest man in accordance with Forbes. Elon Musk’s web value is ~$237.9 billion. To place into perspective, that wealth equals about 80 Donald Trumps (reported web value ~$3 billion), or about twice as a lot as Invoice Gates (web value ~$113.3 billion). 

In contrast to the stereotypical billionaire, Musk is notoriously frugal. In keeping with Inc, he lives in a 400-square-foot tiny home value about $50,000. He even famously refused to purchase a brand new mattress when he was residing in Los Angeles along with his on-and-off associate, Canadian musical sensation Grimes. 

He’s additionally famously outspoken and energetic on Twitter, the place he has greater than 100 million followers.

It doesn’t matter what you consider him, Musk and his companies have captured the general public creativeness, formed popular culture, pushed the event of once-unimaginable applied sciences, and have a watch towards shaping the way forward for humanity.


You personal shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ worth doesn’t rise and fall with the inventory market. They usually’re lots cooler than Jeff Bezos.
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How Did Elon Musk Make His Cash?

How did this eccentric billionaire earn the billions of {dollars} he refuses to spend? His path to riches concerned beginning and investing early in a collection of profitable companies. 

His involvement within the enterprise world began when he was a younger boy. Musk had a driving curiosity in video video games and taught himself the best way to code. By the point he was 12 years previous, he had bought the code for a BASIC-based online game he known as Blastar to {a magazine} for $500.

His journey to billions additionally took him world wide to obtain the very best schooling. 

Musk moved to Ontario, Canada, at 17 and studied on the College of Pretoria. He later studied at Queen’s College earlier than he transferred to the College of Pennsylvania. After incomes a bachelor’s diploma in economics and physics, Musk moved to California in 1995 with the objective of finding out at Stanford College however in the end selected a unique path. 

Quickly, Musk would launch the primary of his many enterprise ventures, Zip2, along with his brother Kimbal. The remaining performs out as follows.

Zip2 Yellow Pages (1995-1999)

Elon and Kimbal Musk borrowed $28,000 from their father to launch a startup that may develop into Elon’s first main success. The co-founders named their startup Zip2, which was the equal of an internet Yellow Pages with maps — basically the primary technology-driven metropolis information. 

Shoppers utilizing the nascent web lastly had the instructions to wherever they needed to go at their fingertips. Once they discovered the companies they had been in search of, they’d be offered with a map to indicate them the best way to “zip to” the enterprise, therefore the title Zip2. 

In 1999, Elon and Kimbal realized how profitable their small enterprise had develop into. Compaq Computer systems paid $307 million to accumulate the know-how. By this time, Musk solely owned about 7% of the corporate, however the sale put about $21.49 million in his pocket. 

Chances are you’ll not know the title X.com, however I’m positive the corporate it changed into: PayPal. After the sale of Zip2, Elon based X.com, one of many world’s first on-line banks. 

X.com proved to be an enormous success and attracted the eye of Cofinity, an organization based by Peter Theil, Luke Nosek, and Max Levchin. The 2 firms merged in 2000 and altered the title of the mixed firm to PayPal.  

In 2002, the group bought PayPal to eBay for a whopping $1.5 billion. On the time, Musk owned 11.72% of the corporate. Meaning his share of the corporate was value about $175.8 million

SpaceX (2002-Current)

When the PayPal deal closed, Musk might have simply retired and lived a financially free life. Nevertheless, he had different plans. He used the cash he earned from the PayPal acquisition to launch an area exploration firm he known as SpaceX. 

Musk, like many people earthbound people, has a deep curiosity in area. His dream is to colonize Mars, and his most bold assertion thus far has been that he plans to place human beings on the pink planet by 2026. 

In 2006, simply 4 years after launching the corporate, SpaceX made its first try and ship a car into the huge vacuum of area. The car, the Falcon 1 rocket, failed to succeed in Earth’s orbit, however all wasn’t misplaced. Following the failure, SpaceX received a NASA contract below its Industrial Orbit Transportation Program. 

Sadly, that was a vivid gentle in what could be a darkish two years for SpaceX and NASA. The following two makes an attempt the corporate made to ship the Falcon 1 into Earth’s orbit failed, practically bankrupting the corporate and its eccentric founder. 

Nevertheless, in 2008, the corporate lastly succeeded and the Falcon 1 orbited Earth, resulting in the corporate’s largest contract but. Shortly after the profitable mission, SpaceX acquired a $1.6 billion contract from NASA below its Industrial Resupply Companies program.  

As we speak, Musk continues to be the biggest SpaceX shareholder. He owns greater than 47% of the shares and 78% of the corporate’s voting rights. 

The corporate continues to be working to colonize Mars, however that’s not its solely objective. A number of specialists from SpaceX and Tesla have been assigned to work on a transportation know-how Musk calls the Hyperloop. 

The Hyperloop is basically a practice in a vacuum. With no drag on the car or G-forces on passengers, the Hyperloop is being designed to journey at excessive speeds for minimal price. In keeping with Musk, a Hyperloop system could be constructed from Los Angeles to San Francisco for about $6 billion. If he can pull that off, Musk’s newest know-how would be the most cost-effective type of transportation to cowl such lengthy distances. 

SpaceX continues to be a non-public firm, so it’s troublesome to get an correct studying of what Musk’s shares within the agency are value. The corporate’s most up-to-date non-public fundraise was at a valuation of $125 billion. At that valuation, Musk’s share of the corporate is value about $58.75 billion — not unhealthy for an organization he began when his whole web value couldn’t have been greater than $200 million. 

Tesla (2004-Current)

Opposite to widespread perception, Elon Musk isn’t a co-founder of Tesla (initially Tesla Motors), the wildly widespread electrical automotive marker. The corporate was based in 2003 by Marc Tarpenning and Martin Eberhard. The 2 employed Ian Wright just a few months later. It wasn’t till early 2004 that the group at Tesla realized a necessity for enterprise capital and received in contact with Musk. 

Musk was so impressed by the corporate that he invested $6.5 million, taking about 86.67% of the corporate’s first Collection A fundraising spherical. In complete Tesla raised $7.5 million in its first spherical of fundraising. 

As we speak Musk owns roughly 17% of Tesla shares. Though he wasn’t a founder, Musk has performed an integral function within the growth of the corporate since his funding in 2004. 

Tesla has had its fair proportion of ups and downs, however Musk’s funding has paid off. The automaker is a publicly traded firm with a greater than $755 billion valuation. Meaning Musk’s stake within the firm is value about $128.35 billion

Lately, Tesla inventory has fallen on exhausting occasions, however even with the ~40% drop in worth the inventory skilled within the first half of 2022, Musk’s early funding within the firm is the largest contributing issue to his wealth. 

SolarCity (2006-2016)

SolarCity is one in all Elon Musk’s most controversial enterprise strikes. The corporate was based by Musk’s cousins, Lyndon and Peter Rive, however Elon was its largest shareholder. The three Musk-eteers had been on a mission to scale back energy price, grid consumption, and greenhouse gasoline emissions with photo voltaic know-how. 

The corporate developed, bought, and put in photo voltaic vitality programs for residential, industrial, and industrial functions. 

The issue is that within the 10 years from 2006 to 2016, the corporate failed to supply a revenue. In 2016, Musk owned about 22% of SolarCity and sat on its board of administrators. 

On the similar time, Musk was additionally Tesla’s largest shareholder and a key board member of the electrical car producer. In 2016, Tesla acquired the struggling photo voltaic vitality firm for $2.6 billion. Elon’s 22% share of the corporate was valued at about $572 million within the deal. 

Years later, traders had been livid as a result of Tesla couldn’t flip SolarCity into the profitable firm Musk believed it could develop into. In keeping with TechCrunch, the corporate’s shareholders unsuccessfully sued Musk for $13 billion on account of the deal. 

Musk has his fingers in a number of areas of know-how, however for a lot of, his Neuralink firm is probably the most attention-grabbing. The corporate is engaged on growing implantable gadgets that act as brain-machine interfaces, or BMIs.

The corporate’s system consists of skinny strands of fiber implanted straight into the mind. The strands learn indicators from the mind and use synthetic intelligence (AI) know-how to find out what these indicators imply.  

Neuralink continues to be extremely secretive about its growth of BMIs, however in accordance with Gizmodo, the corporate has at the very least tried to open an animal testing facility. 

Neuralink is a non-public firm, so figuring out how a lot it contributes to Musk’s web value is troublesome. Some sources estimate the corporate’s worth at between $500 million and $1 billion. It’s troublesome to find out what proportion of the corporate Musk nonetheless owns. There’s no public documentation of how a lot he began with, however we all know the corporate has raised over $300 million in 4 rounds of fundraising. 

Contemplating the stage of the corporate, the quantity of fundraising, and a pure guess that Musk and his cofounder Max Hodak began the corporate with an equal 50-50 possession break up, we are able to estimate that Elon nonetheless owns round 1 / 4 of the corporate, which might add between $125 and $250 million to his web value. 

The Boring Firm (2016-Current)

Elon Musk based The Boring Firm to resolve a comparatively boring drawback — visitors. Because the inhabitants grows and extra vehicles hit the highway, visitors will solely worsen. Musk’s answer to this challenge is making roads below roads in easy-to-dig, low-cost tunnels. 

Nevertheless, the corporate isn’t simply specializing in tunnels; it additionally has its fingers in public transportation with The Loop. 

The Loop is an all-electric public transportation mannequin that brings shoppers from level A to level B with no stops alongside the way in which. Musk designed the answer to be emission-free, environment friendly, and low-cost. The doorway to the corporate’s first commercially-operating loop is on the Las Vegas Conference Middle. 

Primarily based on the newest spherical of fundraising, The Boring Firm is value about $5.7 billion. Though Elon Musk’s share of the corporate isn’t public info, we all know he owned 90% of it in 2018. After different fundraises that doubtless occurred alongside the way in which, he bought about 11% of the corporate earlier this yr. 

Being conservative, we are able to say Musk doubtless nonetheless owns at the very least 60% of The Boring Firm, which might contribute about $3.42 billion to his web value. 


Ultimate Phrase

Elon Musk often is the richest particular person on the earth, however he’s removed from executed constructing his wealth. In some instances, he does so with a easy Tweet. He has famously despatched a number of cryptocurrencies to the moon with easy posts on Twitter, doubtless producing sizable earnings every time. 

Nonetheless, after studying how Musk made his cash, you may come to the identical conclusion I did. Musk made his cash by developing with out-of-the-box concepts and having the heart (and assets) to observe by on them.

Do you suppose Musk will get people to Mars within the subsequent 4 years? I believe it’s a stretch, however that’s his objective and he’s sticking to it. If he accomplishes that objective as he did with so many different enterprise ventures previously, there’s no telling what number of billions of {dollars} it would add to his web value. 

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