Some Interesting Info About Elon

Whether you love him, or you hate him, Elon Musk is a fascinating individual. I just finished Walter Isaacson’s fantastic biography of Elon. It’s an interesting read.

Not long ago, everyone loved Elon. I’m not sure what happened, but the tides seem to have turned. I remember reading about a celebrity who tweeted that Elon was such a horrible human being that she sold her Tesla and bought a Volkswagen EV. The Twitter crew was merciless. There were lots of suggestions that she should have done some research into Volkswagen’s past, and their antics during WWII before making the switch.

Anyway, how can you not hate someone who is worth over $400 billion?

I read the book because I wanted to know more about Musk, his wealth and about him as a person.

Musk’s Wealth

I tried to piece together what makes up Musk’s $400 billion. It’s a little difficult, but I could account for about $250 billion with company ownership. Take this with a grain of salt. It was hard to get exact numbers and some of the articles were contradictory.

Here are some links I used to compile this. https://jasondeegan.com/breaking-down-elon-musks-440-billion-fortune-whats-it-made-of/ and https://www.investopedia.com/elon-musk-net-worth-tesla-spacex-ai-300-billion-8740315.

Both are interesting and quick reads to provide some perspective on the companies and Musk’s wealth.

The Book

So back to the book. Isaacson was given complete access to Musk and to his companies. Some commentary is not flattering, but kudos to Musk for giving Isaacson free rein.

It’s hard not to respect Musk after reading the book. Here’s a guy who simultaneously was building Tesla (working non-stop to produce their first electric vehicle, the roadster, while sleeping on the factory floor) AND building SpaceX. From the start, Musk’s goal for SpaceX was to enable man to travel to Mars. Sounds crazy, but he fully believes that mankind needs an alternative and it’s his mission to provide.

Along the way, he’s made SpaceX profitable by going up against Boeing, Lockheed Martin, and other aerospace companies. In one chapter, Musk talks about the contracts that the big aerospace companies had with the US government. They were all cost plus profit contracts in which the vendor would get a prescribed profit for the project regardless of how long it took or how much it costs. God bless the US government!

Musk negotiated a fixed price contract where SpaceX would deliver at a certain time and cost. Musk mentioned that he launched his first satellite mission for NASA with 500 people where his competitors had 50,000 people working on similar projects.

SpaceX has flown over 400 missions.

Musk’s Companies

Incredible success stories.

How many successful auto companies are building cars in the US? Most outsource parts or assembly to foreign contractors.

How did SpaceX become NASA’s primary aerospace company overnight?

And then there are his other companies. The Boring company dug an underground tunnel system in Las Vegas. It’s fascinating stuff.

CEO Musk

While Musk is the CEO who runs his companies, he is often on the ground-floor, challenging engineers and designing components.

When Musk started SpaceX and was meeting potential investors, they wanted to know who his lead rocket engineer was. He responded “I am”.

Note, that while Musk is heavily involved in X, he is not the CEO.

Skin In The Game

I’m sure some would call him a micro-manager, and some of the folks that worked with him when he started PayPal wouldn’t relish the thought of working with him again.

That said, he had skin in the game. He made it his personal responsibility to make these companies successful because he felt it was his calling to make this happen and because he believed that the missions of each of his companies were critical to the success of mankind.

And while some feel like he’s running X into the ground (we’ll evaluate that in a few years), it’s hard to argue that Tesla, SpaceX, the Boring Company, Neuralink, and XAI aren’t successful ventures.

Pay

Musk does not take a salary from Tesla. The pay package that was challenged in the Delaware court, consists of TSLA stock options.

It’s common for executives to have company stock or options to purchase company stock as part of their pay package. As an investor, we’re happy to see that our executives eat their own cooking. In other words, they have a vested interest in growing the value of the company, and thus the share price of our, and their, holdings.

Musk’s Tesla package is a bit unusual in that it is all stock options and no salary.

Having read the biography, it is clear that Musk likes to make decisions. It’s not a surprise that he would want his compensation to provide him a larger stake in Tesla. He wants to have a greater influence than other shareholders, and owning more of the stock gives him that.

Shareholders (I’m one) approved the package because we believe in his vision and his execution has made Tesla the leader by far in US electric vehicles.

Almost half of the EVs sold in the US in 2024 were Teslas. Read here.

On top of that, Tesla has a world-class network of electric vehicle chargers throughout the US and the world. Their network has more chargers than any other, and they work (many competitors have suffered from regular outages). Many electric vehicle makers that decided to go their own way on charging are now retrofitting their vehicles so that they can use Tesla’s network. Read more here and here.

So, many engaged shareholders are fully supportive of awarding Musk the option to buy more shares given that it incentivizes him to continue to grow the company’s value.

Is He Rich?

Yes. As of this writing, he’s the richest man in the world.

Most of his wealth is tied up in ownership shares in his 6 companies. If they all went bust tomorrow, he’d drop off the list pretty quickly.

While I’m sure he has no problem pulling together the cash to take his 10 children out for a nice dinner, he did have to sell a sizable chunk of his Tesla shares in order to fund his purchase of X.

But yes, he’s rich.

My Thoughts

I read the book and started some research because I was trying to reconcile the 2 sides of Musk. He was an American hero several years ago. Today, there are many (like the young lady from paragraph 2) who despise him.

Obscene wealth is part of it. Musk and Bezos are both in the crosshairs for this, but everyone still loves Warren Buffet and there is very little public hatred towards Larry Ellison.

So, it must be the whole Twitter/X controversy. I don’t use X, or any social media, so I can’t comment based on direct experience, but I do recognize that social media plays an important role in many folk’s lives.

I think Musk’s stated goal of making X more open is commendable. Many Twitter insiders have revealed that there was a very close relationship between the Biden administration and Twitter executives. There was even some information that the US government was given tools to de-prioritize and otherwise filter what Twitter users could see.

As heinous a thought as this is for a country that prides itself on free speech, we recently saw Mark Zuckerberg admit that he succumbed to pressure from the Biden Administration to censor Facebook. Read here from CNBC, and my comments here.

These revelations personally bothered me quite a bit and I wrote a few posts on media bias.

Musk is not always likable. He showed up at his first day at Twitter carrying a sink and said “Let that sink in”

A while back, I watched a History Channel series on the men that made America. Rockefeller, Carnegie, Vanderbuilt. These guys built the financial system and infrastructure that enabled the meteoric rise of the US, but they weren’t very well loved by peers, and sometimes family, during their lifetimes.

Wealth

All that said, I do recognize that there is a huge differential in wealth in our country that is growing almost as fast as the national debt.

It’s a problem and it’s easy to hate someone whose net worth is over $400 billion when some can’t afford to pay their rent. I get it. But it seems wrong to punish success.

Taxing the rich generates a lot of excitement, but if we tax them, they may leave the country, and likely take their businesses with them. I’m proud that Teslas are produced in the US. I’d hate to see that move to Mexico or China or Poland.

And this is part of the reason I write this blog. Putting Musk aside, and ideas about taking his money and redistributing it, any one of us is capable of building wealth.

When Musk was sleeping on the factory floor, the first Roadster probably seemed like an impossible dream. The same goes for a dream of wealth when we’re strapped with debt and we can’t pay our rent.

But finding some savings, time, and investing wisely can make anyone wealthy. I have over 100 posts that cover many of these topics. If you’re new to the blog, start with some of the links in red in the text-section of the home page. Then explore the other posts on the blog pages.

Let Musk do his thing and focus on the things you can do to grow your wealth. I’ll help.

i’d love to hear thoughts and comments.