Yahoo Finance 3 Things Elon Musk Can Teach Us About Keeping Wealth
As a tech wunderkind, aggressive entrepreneur and multi-billionaire who was, at one time, the richest person in the world, Elon Musk is a source of fascination, scrutiny and, sometimes, confusion. He’s difficult to predict, doesn’t always come off as particularly even tempered and doesn’t seem to mind shaking the boat, even if he has a lot to risk by doing so.
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Though a divisive personality, Musk is clearly doing something right: he’s worth $179 billion, according to Celebritynetworth.com. How did Musk build his fortune and what can he teach the rest of us about not only amassing wealth, but also keeping it? To find out, let’s look at Musk’s investment strategy. After all, investing is key to his financial empire.
Also see three career moves Musk made that you should, too.
Focus on Just Two Investment Categories
Most financial experts advocate for heavily diversifying your investments in order to hedge against risk and protect your money should the stock market bottom out. But Musk’s success shows there’s something to be said for putting all your eggs in just a couple of baskets. As far as we know and according to The Motley Fool, Musk investments fall into just two categories: companies he founded or has a stake in and cryptocurrencies.
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Own Your Company? Don’t Sell It Off Entirely
Entrepreneurs looking to build and keep wealth might want to follow Musk’s lead and invest heavily into their own companies. Take SpaceX, Musk’s space exploration technology company, for example. It’s speculated that Musk holds close to it by owning about 44% of this private company, which is valued at $180 billion and presently worth more than Disney or Comcast.
And then look at Tesla. Musk nearly sold the pioneering electric vehicle company to Google for $11 billion when the company was in a financial crisis. Tesla began to bounce back and Musk eluded the deal. Today, Tesla has a market cap of $554.88 billion and is the world’s 15th most valuable company. Think of all the wealth Musk would have lost out on had he sold to Google.
Say No to Passive Index Investing and Go For Active Investing Instead
Musk isn’t one to preach the practice of passive index investing; in fact, he’s condemned it. Along with the investor and entrepreneur Cathie Wood, Musk blasted passive index investing in a 2022 tweet on X, formally Twitter (which, yes, he mostly owns and took private, also in 2022). The two argued that passive investments have controlled too much of the stock market.
“There should be a shift back towards active investment,” Musk said on X. “Passive has gone too far.”
For an ostensibly complex person, Musk’s wealth-keeping approach is fairly simple: Believe in yourself by investing and hanging onto your companies and don’t take a backseat in your journey to becoming, possibly, one of the richest people of all time.
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