Today, the 400 wealthiest Americans own a greater share of the country’s wealth than the bottom 150 million. The United States has the highest number of high net worth individuals in the world, with the number expected to rise in the coming years. This is a clear indication of the wealth and income disparity that exists in the country. While these statistics are sobering, they should not be depressing. Consumers can use them to understand what these figures mean for the various decisions they make, a factor that can help in ensuring proper financial management and generating wealth.
Elon Musk’s Net Worth
Elon Musk’s net worth stands at $23 billion. His story is one of hard work and financial discipline. The 47-year old has overcome numerous challenges in his journey to success and continues to sacrifice in order to ensure the growth of his companies. Based on his inspiring story, there are a number of things every consumer can learn from him regarding debt, budgeting, and overall financial management.
Musk’s Investment Career
Elon was born in South Africa to a South African father and a Canadian mother. This influential technology entrepreneur has inspired many through his life. At the age of 12, Elon who would later become an engineer is said to have launched his first commercial software, a game called Blastar.
Musk dropped out of Stanford in two days to start his first company, Zip2. Together with his brother, they borrowed $28,000 to start the company that would later sell to Compaq for $307 million. With his proceeds from Zip2, Musk invested $10 million into founding X.com. In 2000, the company merged with one of its competitors to form what would later become PayPal. In 2001, PayPal was bought by eBay for $1.5 billion, a sale that saw Musk pocket a tidy sum of $180 million.
After the sale of PayPal, Musk stepped up his investing career by pursuing a string of concurrent entrepreneurial ventures. He launched SpaceX and went on to co-find Tesla, making substantial investments in the automotive and energy company. Later on, in 2006, Musk encouraged two of his cousins to work with him to establish SolarCity, a company in which Musk invested seed capital.
What’s He Like
Musk is said to be a workaholic and a multitasker. He not only uses an evolving strategy to start and grow companies but also makes investments into other sectors through entities such as Vicarious, Halcyon Molecular, and NeuroVigil.
Today, even with Elon Musk’s net worth, he is said to be a dynamic man, He accommodates nature and strives to be a reliable partner to fellow investors and entrepreneurs around the world. With an annual salary of $1,000 from Tesla, Musk refuses to take a paycheck from Tesla, one of the companies he co-founded and refuses his minimum salary every year. The entrepreneur remains focused on building his companies and does not spend money on expensive vacations or hobbies.
Musk’s 5 Best Investments
All high net worth individuals, including Elon Musk, have made a number of incredible investments. Here are some of the best investments Musk made at a relatively young age:
PayPal: While Musk no longer holds a stake in PayPal, this remains one of his best investments ever. When eBay bought $1.5 billion worth of stock in 2002, Musk made a tidy profit. Compared to the amount he had invested in X.com, the precursor to PayPal, this was a good return. The original X.com vision was to unify finance.
SpaceX: After selling his PayPal fortune, Musk is said to have invested more than $100 million in this company. Over the years, the company has recorded impressive financial and technological success. Some sources place its worth at $21.5 billion.
DeepMind Technologies: When this artificial intelligence company was started in 2010, Musk was one of the key angel investors. When it later sold to Google, reports indicate that it was valued at between $400 and $600 million.
Tesla Motors: Tesla is definitely one of the most successful ventures Musk has been engaged in, having invested a significant amount in 2004. After a disappointing run up through 2008, Tesla has since made remarkable progress in announcing new products and recording growth.
The Boring Company: Musk founded this tunnel construction company in 2016. Today, the company is a part of a number of projects in various states. It also has a partnership with the Los Angeles Metro to build an experimental tunnel under the city.
To achieve Elon Musk’s net worth and more, consumers have to not only learn and adopt effective money management basics but also know how to take advantage of opportunities when they present themselves.
Investments by Numbers
Statistics on net worth by age show that there are a number of young people with high net worth. It is essential to understand how to calculate net worth as well as ways to build it in order to be wealthy.
A look at Musk’s investment activities from June 1995 to June 2017 indicates a string of inflows and outflows. The biggest inflow stands at $180 million while the highest outflow is $40 million. While some of his investments were strong successes, others such as Halcyon Molecular have been a complete flameout.
It is important to note that before Elon musk’s net worth reached its current value, there are times when he went broke and had to live off loans from friends as he tried to keep his businesses afloat.
Productivity lessons from Elon Musk
With the rich getting richer, there is no doubt that the gap between high net worth individuals and the poor will keep widening. The good news is that there are a few simple things that consumers can do to improve where they appear in the wealth statistics.
Musk believes that for him to accomplish incredibly difficult things on a tight schedule, he needs to be productive. He considers showering every day to be one of the best ways to take care of his appearance and also feel confident about himself. Musk believes in setting an example for his team as another way to improve productivity. The entrepreneur puts in long hours and motivates his team to ensure they remain a cohesive and effective unit.
Musk uses stretch goals and always has ambitious targets. He says that while he may not achieve all of them, there is a good chance he will reach at least seven out of ten of the goals. Other important aspects when it comes to productivity are developing a wide knowledge base and always assuming you can improve.
Getting your fortune anywhere close to Elon Musk’s net worth means being smart about income and expenses. It also means being productive in your work and getting your team to deliver on their responsibilities.
Elon Musk: Asset-rich but Cash-poor?
Almost all individuals who make it to the list of people with the highest net worth understand the importance of debt-to-income ratio. This is an indicator of how much an individual owes versus how much they earn.
There is no doubt that Elon Musk thinks big. But some people have called him an asset-rich man who is cash-poor. Having taken out a $61 million mortgage on some of his properties, he is evidence that even wealthy people use mortgages to maintain liquidity. However, it is also clear that Musk understands the importance of debt-to-income ratio since he is able to afford the mortgage payments that add up to $180,000 every month. Despite Elon Musk’s net worth, he has used his shares at Tesla to obtain personal loans on a number of occasions.
Financial Advice from Elon Musk
While some of the people with the highest net worth may not have had the advantage of these apps, technology has made life easier and simple. Consumers can take advantage of personal finance apps to manage their money and maybe even build fortunes as big as Elon Musk’s net worth. Below are financial lessons to learn from the billionaire entrepreneur:
Balance your emotional and financial portfolio
Go where others fear to go
Your success is your responsibility
Invest in long-term results
Focus on the impact of your dreams as opposed to the odds
From Musk’s life and career, it is evident that high net worth individuals are always ready and willing to learn. They also seek constructive criticism. They also view obstacles as challenges that they need to overcome, maintain constant focus, and manage money, time, and other resources effectively. Financial education can play an important role in promoting proper financial management. One may not build their wealth to the level of Elon Musk’s net worth, but one can try.