- Elon Musk believes in focusing on making a positive impact, and the money will follow.
- Musk’s single best piece of advice is to constantly think about how you could be doing things better.
- Musk states that the harder you work, the greater the odds of your success.
There are three powerful lessons you can learn from Elon Musk’s experiences.
Elon Musk is the wealthiest man in the world, worth $256 billion. Musk’s journey toward wealth began when he co-founded PayPal. These days, he is most notable for his ownership stake in Tesla, the world’s most valuable carmaker, along with SpaceX, an advanced rocket and spacecraft manufacturer. Now, Musk is also in the process of buying social media giant Twitter for $44 billion.
Musk wasn’t born wealthy. In fact, he had a tough childhood growing up in South Africa and worked odd jobs through his early 20s, even once living in his office for three months. But through sheer grit, an incredible vision, and a little bit of luck, Musk’s skyrocketing net worth may be the fastest accumulation of wealth in history. Here are three money lessons we can learn from Musk.
It isn’t about the money
In his 2012 California Institute of Technology commencement address, Musk stated that his focus wasn’t on making money. His focus was on the difference he wanted to make not just for himself, but for the world.
“Going from PayPal, I thought, well, what are some of the other problems that are likely to most affect the future of humanity? Not from the perspective, 'what's the best way to make money,' which is okay, but, it was really 'what do I think is going to most affect the future of humanity.'”
This is why he started Tesla. “The acceleration of sustainable energy is absolutely fundamental, because this is the next potential risk for humanity.” Autonomous cars also have the potential to “save millions of lives,” according to Musk. The concern over greenhouse gases and global warming also prompted Musk to start SpaceX. As Musk stated on Twitter, it is “essential for humanity to become a multiplanet species & backup the biosphere.” Focus on doing what you love and making a positive impact, and the rest will follow.
Invest in yourself
Musk’s single best piece of advice? “Constantly think about how you could be doing things better, and questioning yourself." By the age of 8, Musk was reading 10 hours a day. He ran out of books to read at the library, so he decided to read the entire Encyclopedia Britannica. From an early age, Musk constantly focused on learning and investing in himself. After teaching himself to program, at age 12 he wrote and sold a video game for $500. After double-majoring in physics and economics at the University of Pennsylvania, he began his entrepreneurial career.
Musk got his first major break in 2002 when eBay bought PayPal. His cut was $180 million, and he reinvested much of that into his other startups such as Tesla, SpaceX, and other ventures. While many would be content with the massive payday, Musk continually invested in himself and his dreams. Both Tesla and SpaceX had rough starts. Tesla almost went bankrupt during the 2008 Great Recession and SpaceX had multiple failed launches.
But Musk’s investment in himself and his companies slowly began to pay off. In 2008, SpaceX was able to close a $1.6 billion deal with NASA and is now worth $74 billion. In 2012, Tesla began its deliveries on the Model S, the world’s first premium electric sedan. Tesla now controls nearly 80% of the EV market.
Now worth $256 billion, over 20 years he has grown his net worth by an unthinkable 1,500 times. This works out to an average annual return of 40%. In comparison, the S&P 500 returned 9% annually during the same period. Musk doesn’t look like he is slowing down anytime soon. With his recent acquisition of Twitter, he is continuing to invest in his empire of business ventures.
Be persistent, work hard, and don’t let failure keep you down
Musk is known for his work ethic. "Persistence is very important. You should not give up unless you are forced to give up.” Musk believes that in order to succeed, people will need to “work like hell.”
According to Musk, working harder than others will improve your odds of success. As he stated, “If other people are putting in 40 hour workweeks and you're putting in 100 hour workweeks, then even if you're doing the same thing, you know that you will achieve in four months what it takes them a year to achieve."
Success didn’t come easy. Musk was ousted from two companies he co-founded, Zip2 and PayPal. Both Tesla and SpaceX were on the brink of bankruptcy as a result of the 2008 recession and many thought Musk would fail again. But he persisted and didn’t give up. Elon Musk learned from his earlier mistakes, and anyone can look at his experiences to find inspiration to reach their own financial milestones.
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