Elon Musk has made billions of dollars through multiple business ventures including Zip2, PayPal, SpaceX, and becoming the CEO of Tesla Motors. His wealth is largely tied to Tesla stock and currently exceeds that of billionaires Bernard Arnault, Jeff Bezos, Bill Gates, and Warren Buffett.
Posted By Jerry Graham
Posted In Money Questions
Last Updated: 06/20/2022
How Elon Musk Made His Money
Elon Musk’s electric car company Tesla and space exploration business SpaceX have made him famous and wealthier than billionaire American icons like Jeff Bezos, Bill Gates, and Warren Buffet.
Elon Musk’s net worth, which rises and falls with Tesla’s stock price, has exceeded $300 billion at various points in time. As of June 2022, Elon Musk’s net worth is estimated at $221 billion. That makes him the richest person on Earth.
But how did he get there?
The Making of Elon Musk’s Fortune
His father Errol Musk is a retired South African engineer. His mother Maye Musk is a Canadian model and dietician. Musk mostly lived with his father after his parents divorced in 1980,
Elon Musk was able to obtain a Canadian passport since his mother was born there. At 17, he attended Queen’s University in Kingston, Ontario before transferring to the University of Pennsylvania on scholarship two years later.
While he was studying, his entrepreneurial spirit was on display when it came to coming up with the money for rent. Musk and his roommate transformed their rented house into a nightclub to raise the rent money, according to Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future by Ashlee Vance. Unfortunately, that venture didn’t prevent him from graduating with over $100,000 in student debt, which he mentioned on Twitter.
Musk was accepted to graduate school at Stanford University. He dropped out after two days to launch Internet startup Zip2.
Elon Musk, his brother Kimbal Musk, and Greg Kouri founded the web-based software company Zip2 in Palo Alto, California. The company developed, hosted, and managed websites for newspapers and media companies.
In 1999, Zip2 was acquired by Compaq Computer and became part of the Compaq subsidiary AltaVista. Elon Musk received $22 million for his stake in the company.
X.com and PayPal
After the sale of Zip2, Elon Musk continued his business career co-founding X.com, a financial services and online payments company. X.com merged with Confinity, an online bank with its own money-transfer service, PayPal.
PayPal was acquired by eBay for $1.5 billion in stock in 2002. Elon Musk was the largest shareholder and received over $175 million from the sale.
Space Exploration Technologies Corp. (SpaceX)
In 2002, Elon Musk used his PayPal proceeds to fund his next business venture, the aerospace manufacturer Space Exploration Technologies, also known as SpaceX. SpaceX is a private company that launches people and satellites into space. Among the company’s goals are reducing the cost of space transportation and colonizing Mars.
SpaceX has been awarded contracts from the National Aeronautics and Space Administration (NASA) and is currently valued at around $125 billion, based on multiple rounds of financing.
Tesla Motors was founded by Martin Eberhard and Marc Tarpenning in 2003. Elon Musk became a first-round investor in 2004. He also became the company’s largest shareholder and chairman of the board of directors.
He later took on the CEO role and was given the title of co-founder. Musk takes no salary, receiving stock options instead of cash.
The Tesla Roadster debuted in 2008 and the Model S launched in 2012. The Model X sport-utility vehicle was delivered in 2015. The Model 3 rolled off the assembly line in 2017 and became the company’s most popular vehicle.
Tesla went public in 2010 offering 13,300,000 shares at an initial public offering price of $17 a share. With shares trading above $650 as of June 2022, it’s not hard to imagine how Elon Musk tops the Forbes list of billionaires.
Elon Musk co-founded Neuralink in 2016. The neurotechnology startup creates devices that are implanted in the human brain. Using artificial intelligence (AI), the company’s devices aim to improve memory and cure disabilities.
The Boring Company
In 2017, Elon Musk founded the Boring Company, a tunnel construction company that specializes in digging tunnels. To generate buzz, the company sold flamethrowers to the public in 2018.
Elon Musk has been an active Twitter user since 2009 and has a following of over 98 million. His tweets regarding Tesla have at times impacted the company’s share price both positively and negatively. His tweets have also moved markets for GameStop, Etsy, and CD Projekt stock as well as cryptocurrencies Bitcoin and Dogecoin.
In early 2022, Musk began accumulating shares in Twitter, becoming the largest shareholder in the company. In April, Twitter’s board unanimously approved Musk’s bid to buy the social media giant for approximately $44 billion and take the company private. As of June 2022, Musk’s acquisition of Twitter is not complete.
Elon Musk in the News
The public’s interest in Elon Musk is not limited to his business success. Being an innovator and the wealthiest person on the planet has made Musk the subject of many news stories. He’s also appeared as a guest on several media outlets.
Some of the stories have been unflattering. His public comments are often heavily scrutinized.
In a 2010 essay for Marie Claire, his first wife Justine Musk, who met Musk in college at Queens University described herself as a “starter wife” and described being treated like an employee he would threaten to “fire.”
Musk made the news in 2013 when he paid nearly $1 million on a rare 1976 Lotus Esprit sports car that was used in the filming of the 1977 James Bond film “The Spy Who Loved Me.”
The New York Times, Wired News, and other media outlets have published reports and anecdotes from employees critical of Musk’s leadership style.
His infamous appearance on the Joe Rogan Experience podcast caused Tesla shares to dip by over 9%.
He served in advisory roles on two of Donald Trump’s advisory councils but stepped away following Trump’s decision to pull the U.S. out of the Paris climate agreement.
Musk signed The Giving Pledge in 2012 and has vowed to “sell almost all physical possessions.”
A Business Insider article published in May 2022 alleged Elon Musk engaged in inappropriate behavior with a SpaceX flight attendant. Tesla stock fell by more than 6% on the news, lowering Elon Musk’s net worth by $10 billion.
His name came up in the Johnny Depp – Amber Heard defamation trial. He was once romantically linked to Amber Heard.