Elon Musk is among the wealthiest people alive, yet he only takes a salary of $1 per year. We’d try to uncover some of the most critical investment secrets that keep him rich.
While Elon Musk is one of the most high net-worth individuals in the world, his actual liquid money is negligible. Let me explain: net worth is the value of all the assets, so it does not include the value of money in a bank.
How Does Elon Make Money
Elon Musk makes a nominal salary of $1 per year from SpaceX and Tesla. That’s not enough for his living. That’s why he uses various other methods to generate cash flow.
First, Tesla provided him with stocks whenever he achieved predefined performance targets. These stocks, when sold, generate a handsome revenue. Besides, he also has investments in assets, including cryptocurrency.
Even after that, the finances don’t work out. That’s because he has a relatively modest lifestyle for a centi-billionaire, allowing Musk to survive on a lesser income. Before going into his cash flow, let’s understand the fundamental difference between cash flow (income) and net worth.
Elon Musk’s Income vs. Net Worth
Simply put, income is the inflow of money in an individual’s given period. At the same time, net worth is the current value of the assets owned by the individual.
As most of us own more assets than the actual money in our banks, our net worth also tends to be significantly higher than our net worth.
The same is the case for Elon Musk. When we call Elon Musk one of the wealthiest men on the planet, it’s based on his net worth. There are more high-paid individuals in this world than Elon Musk. For example, Sundar Pichai, CEO of Google, takes home a salary of about $200 million per annum.
Elon Musk’s net worth mainly comprises his stake in Tesla, SpaceX, and various other companies. Elon Musk rarely sells the shares. Thus, those shares account for his net worth but do not contribute to his income.
Also, besides his extreme riches, Elon Musk’s leadership qualities make him ideal for running these companies.
Elon Musk Expenses
Today, Elon Musk has sold all these assets to liquify his money. His current residence is a tiny home worth $45,000, which is cheaper than the home of an average American. Elon Musk makes a lot of money by selling expensive homes, cars, and other items.
Today, he avoids having any major personal expenses apart from the notable exception of his private jet. His private jet is a necessity rather than a luxury as it helps him swiftly go to different headquarters of his other companies.
Investments like private jets are all to be utilized to help Elon Musk manage his companies and better use their time.
Elon Musk’s Sources of Income
After selling his assets in his former companies like Zip2 and X.com, Elon Musk had gained over $180 Million. These funds provided him with a lavish lifestyle, wherein he bought expensive homes in Los Angeles and many supercars.
Today, he has started selling most of these assets, which have been a significant source of his income. Apart from that, he has various investments.
A couple of years ago, he confirmed that he was invested in Ethereum and Dogecoin.
He is awarded valuable Tesla shares whenever companies achieve specific predefined goals. These awarded Tesla shares are also significant in how Elon Musk makes money.
So, how does Elon Musk earn money? Elon Musk relies on stock options and various other incentives that he receives from his companies.
His expenses are shallow thanks to his overall modest lifestyle and low-cost living. His only significant expense is a private jet, which his companies probably fund.
Apart from that, his sales of personal assets, including real estate, have contributed to his cash flow, helping him survive better.