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How Did Elon Musk, the World’s Richest Man, Make His Fortune?

¿Cómo amalgamó su fortuna Elon Musk, el hombre más rico del mundo?

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Introverted, brilliant, isolated, and a bit nerdy. That’s how Elon Musk, the world’s richest man, was during his childhood.

The young Elon, born in South Africa in 1971, the son of the marriage between model and dietician Maye Musk and Errol Musk, an electromechanical engineer described by Elon himself as “a terrible human being,” spent his days reading lots and lots of books. So much so that he quickly became interested in the science fiction works of Isaac Asimov, especially his Foundation trilogy, which was a complete inspiration for the future creator and founder of Tesla and SpaceX.

In addition to reading many books on science, futurism, and, of course, fiction, the young Elon also had a scientist’s spirit that led him to carry out various projects in his backyard without any supervision from his parents or nanny.

In fact, in a famous interview for Rolling Stone, Musk revealed that his parents were mostly absent during his childhood and his babysitter barely watched over him.

“I didn’t really have a primary nanny or anything, […] I just had a housekeeper who was there to make sure I didn’t break anything. She wasn’t, like, watching me. I was off making explosives and reading books and building rockets and doing things that could have gotten me killed. I’m shocked that I have all my fingers,” Musk explained to the magazine. “I was raised by books. Books, and then my parents.”

His brother Kimbal also explained to Rolling Stone that Elon was passionate about chess, a sport where the key is to anticipate the opponent’s moves. Thanks to this, his brother said, Elon acquired the virtue of seeing ahead of time what was going to or could happen with any life circumstance. “There’s a thing in chess where you can see 12 moves ahead if you’re a grandmaster. And in any particular situation, Elon can see things 12 moves ahead.”

His College Years in Canada and the U.S.

The most important parts of Elon Musk’s life took place in both Canada and the U.S.—countries where he migrated, worked, studied, and then developed his entrepreneurial life.

¿Cómo armó su fortuna Elon Musk, el hombre más rico del mundo?
Tesla cars are displayed during the opening day of Tesla’s ‘Gigafactory’ in Grünheide, near Berlin, Germany, March 22, 2022. (EFE)

Musk, who by 1997 earned a pair of Bachelor’s degrees in physics and economics after passing through Queen’s University in Kingston, Ontario, and the University of Pennsylvania, where he was transferred, paid his own way through loans, scholarships, and part-time jobs. He lived a very underprivileged college life.

Then, when it seemed that the next step in his life would be to seek a Ph.D. at Stanford, he decided to drop out of the program to pursue his entrepreneurial motivations, which had begun a couple of years earlier.

Pre-SpaceX and Tesla Years: Launching Zip2 and Showering at the YMCA

Unlike other billionaires, Elon Musk is an inventor and an engineer who tries to provide solutions to what he thinks may be the great deficits of humanity in the future: climate problems, dependence on Earth as the only planet where the human race can live, and the very obsolescence of the species in the face of the development of machines. Therein lies the success of his two main companies: SpaceX and Tesla.

However, Elon Musk’s success began much earlier, in 1995, with a startup he founded with his brother, Kimbal, and another friend, Gregory Kouri: Zip2.

Zip2, at that time, was an avant-garde company in the midst of the Internet boom, which served as a business directory with a search or navigation system. In other words, it was a sort of yellow page book that provided phone numbers, addresses, and maps.

However, as happened with other cutting-edge projects, such as the famous Terravision that preceded Google Earth, Zip2 struggled to get off the ground in its early days and Musk and his partners had to sleep in their offices or take showers and use the bathrooms of the local Young Men’s Christian Association (YMCA).

Just as in chess, Musk was anticipating where humanity was going, and a year later Zip2 began to find paying customers, sponsors and interested parties to join the platform. After that, in 1996, Mohr Davidow Ventures agreed to invest $3,000,000 in Zip2 in exchange for a majority stake in the company.

His First Millions, X.com, and PayPal

By then, Zip2’s focus had shifted to providing newspapers with the ability to create local directories for their online subscribers. The first customer was The New York Times, but then it grew to 160 newspapers across the United States. By 1999, Compaq Computer Corp. bought Zip2 for $307 million, turning it into the search engine unit AltaVista. Of that $307 million, Musk got $22 million. He was just 27 years old.

¿Cómo armó su fortuna Elon Musk, el hombre más rico del mundo?
A handout image provided by the National Aeronautics and Space Administration (NASA) shows a SpaceX Falcon 9 rocket carrying the company’s Crew Dragon spacecraft being launched on NASA’s SpaceX Crew-4 mission to the International Space Station (ISS) in Florida, United States, April 27, 2022. (EFE)

Almost all of that money was invested in his next company: X.com, a financial services company he co-founded with Harris Fricker, Ed Ho and Christopher Payne in 1999.

This company is considered one of the leading online banks on the planet and, within a year of its founding, it merged with Confinity Inc, which was a software company based in Silicon Valley. The rest of the story is already more or less known to everyone: X.com changed its name to PayPal, which was acquired by eBay in 2002 for the great sum of $1,500,000,000.

Post-PayPal Life, $180 Million, and Borrowing Money for Rent

From the sale of PayPal, Musk was left with $180 million, a figure with which many young entrepreneurs would have decided to retire or look for less complex business alternatives that would allow them to live quietly. But not Elon. He decided to invest almost all of his money in his next two most successful companies: Tesla and SpaceX.

“My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla. I had to borrow money for rent,” is one of Musk’s most frequently quoted statements.

Launching Tesla and Becoming the World’s Wealthiest Man

Together with Martin Eberhard and Marc Tarpenning, Musk founded Tesla Motors in 2003, with the goal of building electric vehicles and clean energy to transform the car market and wean people off fossil fuels. A year later, he invested $6,500,000 to become Tesla’s largest shareholder and chairman. In 2008, he became CEO and, from then on, Tesla’s success has been more than notorious after starting to produce its first car model: the Roadster.

In the early 2000s Musk also founded SpaceX with the contribution of rocket engineer Tom Mueller. SpaceX’s growth was also impressive in a matter of years. It went from being headquartered in a warehouse in El Segundo, California, to having about 160 employees in 2005, who were hired under Musk’s own strict supervision. After that, the company’s development was exponential. It won a competition with NASA, hired more staff, and achieved huge milestones, such as being the first private company to send a spacecraft into orbit and return it safely to Earth.

According to a CEO Today profile, by September 2021, “SpaceX successfully completed its first orbital launch of an all-private crew. Meanwhile, Tesla’s Model 3 became the first electric car to sell 1 million units globally and the company’s quarterly profits topped $1 billion for the first time.”

Today, according to Forbes, Elon Musk has the world’s largest fortune and has put some of his money into buying the most politically and culturally influential social network on the Internet: Twitter.

Fighting Against Big Tech Censorship

The South African billionaire, who promised to make the most of the app’s potential, is now one of the most important celebrities on the planet, even in social networks. He is not only committed to his vision of providing solutions to possible future problems that could affect humanity, but also to addressing a real and complex situation that currently affects the entire planet: the defense of the violated freedom of speech.

What will be Elon Musk’s next step?… Surely this story will continue. And we will witness it.

Emmanuel Alejandro Rondón is a journalist at El American specializing in the areas of American politics and media analysis // Emmanuel Alejandro Rondón es periodista de El American especializado en las áreas de política americana y análisis de medios de comunicación.

Contacto: [email protected]

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