Yahoo Finance Elon Musk: 5 Things Poor People Waste Money On
Despite a rough start to 2024, Elon Musk is once again the world’s richest person, according to Forbes, and in the spotlight this week due to the vote to approve his vote-of-confidence $56 billion pay package being held later today and a sexual harassment lawsuit filed against him and SpaceX recently by eight former employees.
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Even the most news-avoidant person will know who Musk is. If there is one thing we can say with certainty, it’s that the SpaceX and Tesla, Inc. CEO knows how to stir the pot like few others. Musk’s social media influence and business acumen is always up for debate. However, as Aeon reported, “Not since Steve Jobs has an American technologist captured the cultural imagination like Musk.”
We can assume that if Musk wants something frivolous, he buys it. However, there isn’t a great deal of wasteful spending by Musk, who has talked in the past about the need to trim down excessive consumer spending by selling off unused real estate and driving his own Teslas (although he has owned a number of valuable collectible cars).
1. Overpriced Real Estate
According to a 2020 story by CNBC Make It, Musk owned four properties in the Los Angeles area worth around $40 million at the time. However, this was after selling off a few Bel-Air properties and after announcing he vowed to “own no house” as a dedication against being seen as materialistic. He now resides in a spartan two-bedroom house in Bocca Chica near Space X’s HQ.
2. Too Much Car
Many Americans get into serious debt by buying a vehicle out of their income range. Like most billionaires, it would be difficult to think that Musk would buy overpriced, depreciating assets with additional financial commitments to fuel, insurance, repairs and maintenance too. That doesn’t mean he hasn’t splashed out on some collectible cars in the past.
However, although he owns or has owned a 1920 Ford Model T, a Jaguar Series 1 1967 E-type Roadster, a 1978 BMW 320i and a rare McLaren F1, he mainly sticks to driving a Tesla Model S or a Cybertruck now, per CNBC.
3. Dining Out and Ordering Food In
Those without a lot of money don’t often throw cash at expensive discretionary items. It’s the daily overspending on smaller things, like eating out frequently or buying delivered fast food that dwindles savings.
Musk is notorious for living modest. While GQ says he adheres to a strict vegan diet, according to a Vanity Fair article with former partner, Grimes, he is driven by work, at the expense of the finer things in life.
“Bro does not live like a billionaire. … Bro lives at times below the poverty line,” said Grimes. “To the point where I was like, ‘Can we not live in a very insecure $40,000 house? Where the neighbors, like, film us, and there’s no security, and I’m eating peanut butter for eight days in a row?'”
4. Expensive Consumer Goods and Lavish Vacations
It’s one things to respect quality, but as Wealth Wave suggests, Musk rarely buys expensive consumer goods and luxury items for the sake of owning those brands. Purchasing high-end clothing, accessories and other luxury goods that depreciate quickly is often unnecessary and can strain finances.
Musk has made a couple of exceptions. As we reported in March, Musk had a Tesla diamond and ruby ring custom-designed and has a Richard Mille watch valued at $200,000. However, Business Insider reported that in 2015, Musk stated that he had only taken two weeks off during the previous 12 years, when he founded SpaceX.
5. Debt and Interest Payments
Accumulating high-interest credit card debt is a significant waste of money for those who can’t afford it, but it’s sometimes unavoidable. Interest payments can quickly exceed the original amount borrowed and can cause a financial stress that is hard to get rid of.
Musk has said himself that he’s cash-poor. According to Business Insider, Musk told investor/podcaster Cathie Wood, “Some people think I have a lot of cash. I actually don’t.”
Even if Musk relies on mortgages and credit day-to-day, as he’s said, it’s more than likely responsible, or good, debt he’s using, like a lot of his fellow tycoons do.
For Musk, his companies are his hobbies and invests money and time in them. Business Insider said that his away-from-work interests include things like music, books and video games. “Hang out with kids, see friends, normal stuff,” Musk said. “Sometimes go crazy on Twitter. But usually it’s work more.”
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