How did Elon Musk make his money?

Elon Musk is a centibillionaire who is best known for Tesla and SpaceX. But how did he make his money? We take a look at his journey.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

question marks written reminders tickets

Image source: Getty Images

Elon Reeve Musk made his money in several industries, though Tesla is currently his most successful enterprise. A business magnate and engineer, Musk is one of the richest people in the world. He’s also known for investing in risky industries, including space rockets and electric cars when both seemed the stuff of science fiction.

In fact, Musk has said that one of the keys to his success is taking risks. When he created SpaceX, a rocket-building company, he was quoted saying, “Creating a rocket company has to be one of the dumbest and hardest ways to ‘make money’. But I thought, ‘nobody is going to be crazy enough to do space, so I’d better do space.'” 

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

[top_pitch]

Where did Elon Musk go to college?

Musk was born and grew up in South Africa, where he eventually enrolled at the University of Pretoria. He soon moved to Canada to attend Queen’s University before moving on to the University of Pennsylvania. He eventually graduated with two bachelor’s degrees: one in economics and one in physics.

When he was 23 years old, Musk held internships at an energy storage company and a video game developer. A year later, he joined Stanford University’s PhD programme in energy physics and materials science but quit after just a few days to pursue his own business. Still, these studies and internships formed the base for how Elon Musk made his money later on.

How did Elon Musk become a millionaire?

Just after leaving Stanford in 1995, Elon Musk and his brother Kimbal founded Zip2 Corporation. The company provided city guide and directory software to newspapers. In 1999, the company was sold to Compaq Computer Corporation for over $300 million (£216 million). At the age of 27, Musk became a self-made millionaire.

Musk used the money from that sale to start X.com, which eventually morphed into PayPal. After just three years, eBay acquired PayPal for a cool $1.5 billion (around £1.1 billion), of which Musk received a significant portion.

[middle_pitch]

Is Elon Musk a billionaire?

By the 2000s, Elon Musk was doing big things. In 2001, he pursued one of his biggest passions when he founded SpaceX, which designs and manufactures rockets and spacecraft.

In 2004 he joined Tesla’s board of directors just a year after the company’s foundation. By 2007, Musk had assumed leadership of the company and was overseeing designs and manufacturing.

Both SpaceX and Tesla had some rocky years along the way, but SpaceX eventually generated billions of dollars in government contracts. In 2020, the company sent two NASA astronauts to the International Space Station. The next step is private flights into orbit on the company’s Crew Dragon vehicle. This alone could generate many more millions for Musk.

Musk debuted on the Forbes Billionaires List in 2012, thanks to Tesla. Just a few months earlier, Forbes had estimated that Musk’s net worth was ‘only’ $680 million (£490 million). But once Tesla unveiled the Model X car (and before it went into production in early 2013), Tesla stock skyrocketed and pushed Musk into the billionaire list.

Elon Musk is also a co-owner of SolarCity, a company that focuses on solar panels and systems and is now a subsidiary of Tesla.

How much money does Elon Musk have now?

As of 2020, Elon Musk is a centibillionaire (somebody with more than one hundred billion in a given currency) and the second richest person in the world with a fortune of $162.4 billion (£117.3 billion).

Just a year ago, in March 2020, Musk was ranked 35th in the list of richest people in the world. Since then, Tesla’s stock split caused a massive 720% growth. At one point, the stock earned him over $10 billion (£7.2 billion) in a week.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »