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Billionaire success stories abound. They range from tech geniuses to entrepreneur moguls and old money inheritors.
Mark Zuckerberg, for instance, created Facebook in a bid to streamline connectivity among Harvard University students — a novel tech idea at the time. The site ballooned into one of the biggest and most significant social media companies in history, making Zuckerberg one of the planet’s wealthiest men.
Jeff Bezos kick-started Amazon.com Inc. as an online bookstore. Currently valued at over $1 trillion, the company dominates e-commerce, putting Bezos among Earth’s top two wealthiest men.
Warren Buffet of Berkshire Hathaway — the fifth-richest man on Earth, built his wealth via a subtle but calculated, low-risk investment approach that spanned decades.
And then there’s Elon Musk, who, unlike most billionaires, amassed his fortune through successful business operations rather than a single large success.
Hailed as a millennial genius, Musk rose to prominence as the CEO of electric car company Tesla Inc. (NASDAQ: TSLA) and his private aerospace enterprise SpaceX. The entirety of his assets makes him the wealthiest person alive today.
As expected, being the richest and most famous billionaire has privileges. And Musk tries to use them in the best way he deems fit. For instance, he can afford to troll Manchester United fans or throw jabs at President Joe Biden. For Musk, part of this privilege includes dating other famous people like screen-goddess Amber Heard, actor Talulah Riley, singer Grimes and a host of others.
He’s concerned about population decline. And what better way to show that than fathering 10 children? So far, Musk’s biggest 2022 news is his abandoned $44 billion attempt to take over Twitter. The social media company has filed a legal proceeding against him.
How did Musk get so wealthy? Benzinga looks at how Musk made his money, how that informs his business decisions and how investors can take lessons from his journey.
Musk was born on June 28, 1971, in Pretoria, Transvaal in South Africa, where he grew up. His father, Errol Musk, was an engineer, and his mother, Maye Musk, a dietitian and a supermodel — the oldest model to appear in a CoverGirl campaign. Musk’s family was well off. As the son of a mining baron, he had a relatively good head start on his journey to being the wealthiest man alive.
Musk reportedly had a remarkable talent for computers as a child, creating his own video game at 12 and selling it for $500. At 17, Musk emigrated to Canada to escape compulsory military service in apartheid South Africa. Musk began his tertiary education at the Queen’s University of Ontario and subsequently transferred to the University of Pennsylvania in 1992, majoring in physics and economics.
While at the University of Pennsylvania, Musk got his first taste of a risk-averse business venture when he and a few friends leased a home outside of school and converted it into a nightclub.
On graduating, Musk briefly moved on to grad school. He enrolled in a physics Ph.D. program at Stanford University in California, then dropped out after two days. Like other budding entrepreneurs, Musk decided to stake his lot in the internet boom. And so, with his brother Kimbal, Musk founded what would go on to be his first successful venture — Zip2.
In 1999, they sold the company to Compaq Computer Corp. for $307 million, and Musk netted $22 million. This laid the foundation for his later business exploits.
Musk has amassed billions of dollars through his involvement in numerous businesses, from starting PayPal and SpaceX to Tesla. His equity in Tesla contributes significantly to his net worth. Here’s a review of Musk’s journey from enthusiastic entrepreneur to global financial magnate.
Zip2 was Musk’s first business brainchild. It was a web-enabled yellow page with a map that provided online city guides while doubling as a directory for newspapers and other businesses. It was a successful attempt to reap profit by leveraging the internet boom of the time. With key founding capital sourced from family, the Musk brothers partnered with investors like Greg Kouri.
The company soon grew big enough to catch the attention of computer manufacturing giant Compaq, which coughed up more than $340 million for Zip2 in 1999. Elon Musk’s 7% company shares meant he walked home with $22 million in his pocket — becoming a multimillionaire at 27.
To celebrate, Elon Musk bought a $1 million McLaren F1 supercar — an action he later admitted to CNN was out of character for him. Musk accidentally wrecked the car a year later when trying to show its acceleration. For Musk, the lucrative Zip2 deal was just a starter. Musk was already laser-focused on his next big business venture — X.com.
In 1999, Elon Musk co-founded X.com, another internet-based startup. X.com was one of the earliest fintech companies to emerge. At the time, the company focused on providing online financial payment services by incentivizing signups. The concept was innovative and eased digital fund transfers. After one month of operations, X.com added over 200,000 new customers. But despite plowing millions of his earnings from Zip2 into it, investors deemed Musk inexperienced to be CEO.
In March 2000, X.com merged with close competitor Confinity, a software company co-founded by famed angel investor Peter Thiel. The merger birthed a fintech payment transfer giant now known as Paypal. Musk returned to the scene as CEO of the newly merged PayPal. Although PayPal remains one of Musk’s successful companies, it had a rocky beginning. At one point in 1999, it was voted among the worst business ideas, and Musk was ousted as CEO.
In 2002, eBay bought PayPal for about $1.5 billion in stock, and Musk netted approximately $180 million post-tax. But Musk did not appear to be slowing down, as he already had some ideas in the works. With the enormous payout from PayPal’s sale, the entrepreneur invested in SpaceX, Tesla and SolarCity.
Musk used the majority of his earnings from his PayPal investment to establish Space Exploration Technologies Corp., also known as SpaceX. He founded the company with the goal of colonizing Mars.
With $100 million from his fortune, he launched the company in 2002 and became the company’s CEO and chief engineer. However, the company suffered multiple failed launches, almost putting it out of business. Fortunately, Musk’s investments eventually paid off. In 2008, SpaceX secured a $1.6 billion deal with NASA after its first successful rocket launch.
SpaceX launched its first crewed space flight in May 2020. In August 2022, the company was valued at $127 billion, a $27 billion increase from the previous year’s $120 billion valuation. SpaceX is now the sole manufacturer of reusable rockets that can land vertically. This feat has landed it an exclusive deal with the U.S. government and NASA.
Musk’s brilliance is also visible in SpaceX’s Starlink constellation pilot project. The Starlink project, launched in 2015, aims to provide affordable internet worldwide using a constellation of low-orbit satellites.
A year after establishing SpaceX, Musk invested over $6 million into Tesla Motors, joining the ranks of the company’s board of directors. Martin Eberhard and Marc Tarpenning originally founded Tesla in 2003 with the vision of manufacturing electric sports cars that can compete favorably with their diesel counterparts in efficiency and driving range.
As the primary shareholder, Musk became CEO of Tesla in 2008 and transformed the company into one of the most renowned global electrical vehicle (EV) producers. Musk’s tenure at Tesla has not been without incident. Ousting Martin Eberhard and taking over as the CEO was controversial. The corporation also had its share of problems that nearly bankrupted it on multiple occasions.
Tesla has become an EV juggernaut, controlling over 60% of the U.S. EV market with a market capitalization of about $950.48 billion — down from $1 trillion in 2021 because of supply chain woes and inflationary pressure. Musk owns a sizable portion of this stock.
Musk sold some percentages of his shares to finance his now-abandoned Twitter acquisition. He currently holds 14.9% of the company, which amounts to over $141 billion and excludes issuable stock options and compensation packages. Tesla accounts for most of Musk’s net worth.
In 2016, Musk founded The Boring Co., a transportation and utility tunneling venture, and Neuralink, a neurotechnology startup. He has invested at least $100 million in each company. These two most recent endeavors illuminate the mentality that made Musk the man he is today. Both projects are very speculative.
Neuralink is valued at over $500 million and aims to create telepathic connections between humans and machines via sensors. Although no human clinical trial has been documented, Neuralink’s clinical trial using pigs showed impressive results.
The Boring Co. seeks to provide rapid point-to-point city-wide transportation through tunnels, thereby solving the traffic problems that plague big cities. The company is valued at roughly $5.7 billion and has already completed one loop system in Las Vegas.
Although few analysts doubt the long-term profitability of either of these business ventures, Musk makes his living by taking huge risks. The same strategy, which involved investing millions of dollars on unimaginably challenging projects, is what made Musk the world’s richest person.
On the face of it, Musk’s long string of risky yet successful investments may come off as rash and impulsive. However, when constructively analyzed, you notice a big-money reinvestment pattern that consistently delivers results.
Musk reinvested a large chunk of the $22 million he reaped from Zip2 into his next business venture X.com. Against all odds, X.com thrived. And thanks to its merger with Confinity Inc. to form PayPal, it became super competitive and profitable, earning Musk an after-tax profit of $180 million when it sold to eBay for $1.5 billion.
According to Musk, of his $180 million profit from PayPal, he invested $100 million into SpaceX, $70 million into Tesla and $10 million into SolarCity Corp. So literally, he reinvested all his fortune from the PayPal deal into his new business ventures.
Musk had a clear vision of what he wanted to accomplish and was willing to take risks to make it happen. The result speaks for itself. While such risk-taking may appear reckless, people tend to overlook that Musk takes calculated chances. He had a goal and a vision for the future, and he worked hard to achieve both.
Musk’s investment in Tesla and SpaceX ushered him into the billionaires club and, subsequently, to become the wealthiest man alive. Tesla began producing and supplying its first mass-market vehicles in 2012. At that time, Musk’s net worth was in the millions. He became a billionaire in 2013 when the company started manufacturing and supplying the Model X.
In recent years, Tesla shares grew from $61 in 2019 to over $300 per share after its stock split. In October 2021, Tesla joined its peers Apple and Microsoft in the $1 trillion club when its stock exceeded $1,000 per share. Within the same period, Musk’s net worth grew to over $203 billion, edging out Bezos, Gates and Zuckerberg to become the world’s richest man.
His 48% stake in SpaceX accounts for the remainder of his wealth. With SpaceX’s valuation at around $127 billion, Musk’s share in the rocket maker plus his share from Tesla and other assets put his net worth solidly above $210 billion.
Musk has overcome numerous personal and business challenges on his journey to the top. His advice is invaluable because wisdom comes with experience, and he has an abundance of it. Here’s a review of a few success tips from Musk’s podcast interviews that can help budding and well-established entrepreneurs succeed.
Musk’s first tip for success is to play to your strength.
“A lot of the time, the people you want as leaders are the people who don’t want to be leaders,” he said. “Forcing yourself to do anything or be anyone you do not want to always ends up in disappointment. Play to your strengths, and you’ll succeed.”
All of Musk’s high-paying investments are in sectors where he is strongly grounded. The same logic applies to personal investments and business operations.
Musk advises investors and budding entrepreneurs to try to give back to society.
“Try to have a positive net contribution to society,” he said “That’s something to aim for.”
Musk says giving back something positive to society will return more dividends for everyone and ultimately you.
He encourages entrepreneurs to read a lot of books and “to ingest as much information as you can and develop good general knowledge, so you at least have a rough lay of the land of the knowledge landscape.”
Finally, Musk advises entrepreneurs to learn and embody the art of communication, making it clear that communication is the key to success, including wealth building.
“Talk to people from different walks of life and industries, professions and skills,” he said. “Learn as much as possible.”
Musk values connection and learning as a culture and as a species. According to the entrepreneur, this attitude is a major contributor to the success he has enjoyed.
Musk’s shares in Tesla and SpaceX primarily made him wealthy. His combined stake in the two companies is worth over $200 billion.
Musk started his entrepreneurship journey in the mid-1990s with his investment in Zip2, a web-enabled directory that provided online city guides. He sold the company and made about $22 million, which served as the foundation of his entrepreneurship conquest.
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