Yahoo Finance Following in the Footsteps of a Billionaire: How Does Elon Musk Invest His $214B Fortune?
After getting approved for a $46 billion pay package from Tesla, Elon Musk is once again the wealthiest man in the world. His investments tell the story of how he got there. Here’s what Musk owns today and why, in his own words.
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Tesla
Musk’s most famous investment is Tesla. He currently holds shares and options in the company totaling around $77 billion. Musk initially paid $6.35 million for about 16% of the company in 2004. Not a bad ROI for a 20-year hold!
Musk’s decision to invest in Tesla back then was as much about building a better future as it was about creating a profitable business. He continues holding such a large percentage of his net worth in the company today, because he still believes in Tesla’s mission.
This brings up one of Musk’s key investment philosophies: He doesn’t pursue diversification just for the sake of doing so. He places large bets on companies he controls, saying, “It’s OK to have your eggs in one basket as long as you control what happens to that basket.”
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SpaceX
Musk’s second-largest investment is his SpaceX holding, which is currently valued at around $71 billion. While Tesla is building toward a more sustainable future, SpaceX is helping to usher in the next generation of space travel.
Many people might think it’s too big of a risk to jump from building a car company to a spaceship manufacturer. But not Musk. “There’s a tremendous bias against taking risks,” he said. “Failure is an option here.”
Among other things, Musk reminds us that accepting a certain level of risk can be an important step toward building wealth.
SpaceX is still a private company, so you can’t buy any direct shares in it just yet. But there are some trusts and mutual funds that hold it in their portfolios. These include the ARK Venture Fund and the Baron Focused Growth Fund.
X
Musk’s next-largest investment is in X, the platform formerly known as Twitter. He paid around $44 billion for the popular social media site in 2022. Just a few years later, analysts estimate that the value of Musk’s ownership stake has plummeted to $8.4 billion.
Musk said he invested in Twitter because he believes in “its potential to be the platform for free speech around the globe.” That makes this deal another example of the Tesla CEO investing to build the future he believes in.
Musk’s Twitter acquisition is also a good example of the downside risk in his investing philosophy. He likes to buy or create companies that he believes can play an important role in the future, but that doesn’t always work out. When it doesn’t, the losses can be substantial.
The Boring Company
Musk also holds about $3.3 billion in shares of The Boring Company. He started the business with the idea of constructing safe, fast and low-cost transportation options via tunnels. The Vegas Loop project has been the company’s most high-profile success thus far.
Musk doesn’t spend a lot of time talking about the Boring Company anymore, but that doesn’t mean he’s going to sell: “I don’t think it’s a good idea to plan to sell a company.” This shows that he remains committed to his long-term views, even if they don’t always play out exactly as he expects.
Bitcoin
Musk also holds several kinds of cryptocurrency. He believes in bitcoin as a store of value, in part because he’s been unhappy with how the federal government has inflated away the dollar’s value.
We don’t know how much bitcoin Musk holds personally. But on-chain data shows that Tesla owns 11,510 BTC, and SpaceX holds 8,290, as reported by CryptoSlate. At present prices, that’s a little over $750 million in BTC for Tesla and more than $540 million for SpaceX.
Musk has said the dollar “will be worth nothing” if the national debt continues to soar. This is the same argument many of bitcoin’s staunch proponents make, showing that Musk believes a digital asset-driven future can happen.
Dogecoin
Musk has also said that he “owns a bunch” of Dogecoin. Although we aren’t sure exactly how much, some theorize he owns a wallet with 36 billion dogecoin in it — good for around $500 million by today’s prices.
While he sees bitcoin as a hedge against the dollar, Musk views dogecoin as the “people’s crypto.” He imagines a world where people use dogecoin to buy and sell things on the internet just like we use the dollar today.
Key Takeaways From Musk’s Investing Strategy
You may or may not want to invest in the same companies Musk likes, but there are a few key things everyone can learn from his approach to building wealth.
Invest In the Future
Each of Musk’s main investments corresponds to a thesis he has about the future. Tesla is focused on sustainability, SpaceX on interplanetary travel and so on.
You may want to think similarly while making your investing decisions. Buying a company today that becomes important tomorrow can be a great way to build wealth, as Musk’s story proves.
Bet On Yourself
Musk has also repeatedly bet on himself throughout his career — from his early days at PayPal to new ventures like X and Neuralink. He starts or buys into a company, helps build it and then uses the profits to launch new businesses. This process has helped Musk increase his wealth exponentially over the years.
You may be able to follow a similar approach with local businesses and side hustles. Put the money you make into pursuing new opportunities like Musk did, and you may just build yourself a brighter financial future.
Stay Committed
Finally, if you want to invest like Musk, you have to stay committed for the long term. Musk could have sold his Tesla stake for a sizable profit many times, but he’s decided against it. Musk has remained committed to his vision of a sustainable future, and he’s become the richest man in the world thanks, in large part, to his unwavering dedication to his ideals.
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This article originally appeared on GOBankingRates.com: Following in the Footsteps of a Billionaire: How Does Elon Musk Invest His $214B Fortune?
