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Where does Elon Musk keep his billions?

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INTRO 

SpaceX and Tesla are the two most famous companies of this era, and they can’t be named in a sentence that doesn’t have the name ‘Elon Musk’ in it. And yet, there was a time where both of them were not only unknown to people, but also at the verge of bankruptcy. But unlike any other CEO, Elon Musk created and then rescued two companies at the same time and brought them both to multi-billion dollar valuations. And there’s no doubt the man deserves the worth and level he’s on right now. Just as you know from the title of this video, today we’re going to be talking about where does all the money Elon Musk has, is being saved. Although banks are dominant when storing money is concerned, but who will trust a bank with billions of dollars in cash. I wouldn’t. 

As much as genetics plays its role in inheritance, Elon’s father really deserved a son like him. For some of you who don’t know, his father, Errol Musk was a South African electromechanical engineer, pilot, sailor, consultant and property developer. With such traits, there’s no doubt in Elon’s qualities. For a simple introduction, Elon Reeve Musk is a business magnate, industrial designer, engineer, and philanthropist. He is the founder, CEO, CTO and chief designer of SpaceX; early investor, CEO and product architect of Tesla, Inc.; founder of The Boring Company; co-founder of Neuralink; and co-founder and initial co-chairman of OpenAI. Yep, that was the simplest introduction Elon Musk can have. Although he’s ruling the world around him, there was his hard start where he faced obstacles and started from scratch. Musk belonged to Pretoria, South Africa and lived mostly with his father in the suburbs of Pretoria. As a beginning, Musk taught himself computer programming that led him to create a video game called Blastar, which he sold for $500 at just the age of 12. When he turned 17, he moved to Canada to avoid the mandatory service in the South African military. Musk obtained his Canadian citizenship that year because he thought it would be easier to get American citizenship that way. He surely got that ‘Mastermind’ kind of brain. He did become a U.S. citizen in 2002. 

Elon Musk is an American entrepreneur and businessman who founded X.com in 1999, SpaceX in 2002 and Tesla Motors in 2003. He was interested in computers since he was just 10 years old. He was the child who was so into his daydream, that his parents and doctors ordered a test to check his hearing. You might have heard that ‘in order to achieve something, you should dream big’. And Elon Musk gave a perfect example of that phrase. Jokes aside, he was an innovative child, because when he was bullied at the age of 15, he went through a growth spurt and learned how to defend himself with karate and wrestling. After graduating with an undergraduate degree in economics from the University of Pennsylvania, Musk headed to Stanford University in California with a mindset to pursue a Ph.D. in energy physics. Here comes the amazing twist, because his move was timed perfectly with the Internet boom as he dropped out of Stanford after just two days to launch his first company, Zip2 Corporation in 1995. He sold the company in 1999 for a whopping $307 million. 

In the early 2000s, Elon Musk achieved what any entrepreneur would’ve dreamed of having. He successfully sold his company for over a billion dollars. He personally received $165 million, and this is exactly where most people would call it the end, but for Elon this was just the beginning. Since then, his intellectual level and entrepreneurship skills took him where he is now. But does he really have that much amount of money for which banks went short? We’re surely going to break your curiosities about how much Elon Musk really earns, and where exactly his money goes after he gets them under his name.  

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Tesla Motors is a company that designs and manufactures electric sports cars. Tesla was able to succeed in the electric car market where other large manufacturers failed. Musk is one of the major driving forces behind SolarCity, a company founded by his cousins. He is also the largest shareholder of the company. Musk owns about 20% of Tesla’s stock, a stake that’s worth more than $50 billion. Overall, Musk’s net worth is estimated to be at least $66.7 billion. And as far as SpaceX is concerned, it’s a company that creates and manufactures space launch vehicles, with a particular focus on rocket technology. With an aim to reduce the cost of space flight in hopes of expanding human life beyond Earth, Musk initially found it impossible to get funding for SpaceX, which investors saw as a pipe dream. Thus, without even thinking of the results, Musk channeled all his own money into the company to make SpaceX a reality. He went against every piece of business advice ever written, but this decision of his, skyrocketed his success and made him today’s Elon Musk. SpaceX has a $1.6 billion contract with NASA to resupply the International Space Station, effectively replacing the Space Shuttle. 

Elon Musk is the man who was ranked 25th on the Forbes list of The World’s Most Powerful People, and was ranked joint-first on the Forbes list of the Most Innovative Leaders of 2019. He is the longest-tenured CEO of any automotive manufacturer globally. As of 2020, his net worth, estimated by Forbes is to be US$93.3 billion, making him the 5th richest person in the world. He became famous for starting Tesla Motors and SpaceX but he first made his fortune as a co-founder of PayPal. You already know the importance of PayPal nowadays, and Elon Musk knew that, years before the idea even existed. Musk co-founded X.com as an online payment company that eventually became PayPal before being acquired by eBay for $1.5 billion in stock out of which $165 million was given to Musk. That’s impressive.  

Well, for most people, they don’t keep a large amount of cash at their homes, you know, we’re not living in the 12th or 13th century. What we do is use a financial institution. And for a financial institution like a bank, most wealthy and rich people use them as a means for them to use cash equivalent. Now, cash equivalent is any legal monetary product that the financial institution gives you for the exchange of cash. And this principle is applied to all the banks out there. Also, if you know how these saving accounts work, the highest amount of interest you can get is of 0.03% and you have to keep a specific amount of money in our account on daily basis for your money to be doubled, which would take no less than 20 years at that low rate. This is the main reason why mostly rich people don’t use the bank. And here, we’re talking about no rich man, but a billionaire. And billionaires don’t keep their money in one place; rather they have diversified portfolios, owning stocks, investments, and businesses, etc. They definitely don’t have a savings account with $1 billion sitting in it. Actually, on average billionaires have only 15-17% cash of their total net worth in liquid assets, which they use to further invest or to spend on some semi-cash commodities such as jewels and arts or real estate for say. 

So how it works for billionaires is they never invest their money on a single business, instead they have dozens of businesses to invest in, and that’s exactly how their financial system works. As for Elon Musk, he’s also a man of dignity and walks with very caution when it comes to investing money. Like I mentioned before, his mastermind is what enables him of planning the best for his billions and never regrets investing his money. It’s mind-blowing how Musk became a multimillionaire in just his late 20s when he sold his start-up company ‘Zip2’ to a division of Compaq Computers. And while the coronavirus pandemic has been an economic disaster for most Americans, it was nothing for Elon Musk. Don’t get me wrong but what could possibly go wrong with a businessman holding billions of shares from his companies. The Tesla CEO has made more than $48 billion between March 18 and August 13, an increase of more than 197%. That’s significantly more than any other billionaire made during the same time. But after making so much money, where did all that cash go? A simple answer to this question is an investment. Like I mentioned before, billionaires have dozens of companies on to which they invest billions of money. Elon Musk is behind more than one company that has disrupted its respective industry. His best investments include PayPal Holdings, Inc., SpaceX, DeepMind, Tesla Inc., and The Boring Company. These investments have added more than $17 billion to his net worth so far in 2020. Musk has said in the past that he typically only invests money in his own companies. In 2018, Musk himself contributed roughly 90% of the $112.5 million raised that year by his company, The Boring Company, according to The New York Times. 

The artificial intelligence company DeepMind Technologies was launched in late 2010 with Musk as one of its key investors. and it was speculated that the sale was between $400 and $600 million. Despite investing in companies, another way Elon Musk invested his money was buying houses. He does own a few homes in Los Angeles that have been purchased for approximately $55 million. You heard the amount right. He also owns a private grantmaking foundation and according to Inside Philanthropy, the foundation has given out a total of $783,700, including a donation of $250,000 to build a solar-power system in Soma City, in the Fukushima prefecture of Japan, following the tsunami disaster there in 2011. Musk has also invested in Mahalo when the site was founded in 2007. And if you’re unaware, Mahalo is like Wikipedia, Ask Jeeves, and Quora all on one website. The site allows people to post and answer questions. Musk donated $1 million in funding to a new science dedicated to Nikola Tesla as one of “history’s most important inventors,” in 2014. He has undoubtedly made many other investments like a $40 million investment in Vicarious, donation of $10 million to the Future of Life Institute, prizes including the $30 million Google Lunar XPrize, and the $2 million Wendy Schmidt Ocean Health XPrize 

OUTRO 

Industrial designer and technology entrepreneur, Elon Musk has made a long way to where he stands right now. And if Tesla is able to raise the right amount of shares, it can take Elon on top of the list of ‘the richest man on this planet’.

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