#NewsBytesExplainer: How did Elon Musk become the world's richest man?
What's the story
Elon Musk became the richest person on the planet in 2021, and he has held the spot since then. In the last few months, however, his net worth has taken a beating. Last week, his fortune dipped below $200 billion for the first time in over a year. Here, we take a look at how Musk's net worth took shape over the years.
Innovative mindset
Musk made his money from different ideas
Being a billionaire is no easy task. Well, unless you're born into the Saudi royal family. Musk was born into a well-off family. But there is a sea of differences between being well-off and being ultra-rich. He made his billions differently compared to his compatriots. Musk made bets on several ideas, and the sum total of those ideas made him the richest private citizen.
Beginning
He made $22 million from the sale of Zip2
Musk's race to become the richest person began with Zip2, an online "yellow pages" company that he started with his brother Kimbal Musk and Gregory Kouri in 1995. Four years later, they sold it to Compaq for $307 million. Musk netted $22 million from the sale. After that, he was on to his next venture, X.com, which later became PayPal.
Mega fortune
Musk netted $175.8 million from the sale of PayPal
Musk's first mega fortune came from the sale of PayPal to eBay in 2002. The latter acquired PayPal for $1.5 billion, and Musk received $175.8 million. He didn't let his millions rest. Most of it went into SpaceX, which he founded in 2002 to build affordable rockets and to colonize Mars. The next year, he made the decision that drastically changed his fortunes later.
Almost bankrupt
Musk was close to bankruptcy in 2008
In 2003, Musk funneled $6 million into Tesla as he led the company's Series A funding. But the start was not great. Musk and his companies were awfully close to bankruptcy in 2008. However, things started to change in the same year. SpaceX's $1.6 billion deal with NASA in 2008 and Tesla's Model S in 2012 were the catalysts behind Musk's change in fortune.
First billions
Musk entered the billionaire's list in 2012
In March 2012, Musk entered the elite list of billionaires for the first time. He debuted on the Forbes Billionaire List with a net worth of $2 billion. Five months before he made the list, his fortune was estimated to be $680 million. This huge leap in net worth was mainly thanks to Tesla Model S, the company's first mass-market car.
Major shift
The year 2020 saw major movement in Musk's fortune
From 2012 onward, Musk's fortune saw a steady climb. According to Bloomberg Billionaires Index, he touched $10 billion for the first time in 2014. It was in 2020 that we saw a major movement in his net worth. This was due to the role played by Tesla in the electric car revolution. The world started embracing electric cars, and Tesla was at the forefront.
Centibillionaire
Musk became world's fifth centibillionaire
At the beginning of 2020, Musk's estimated net worth was $28 billion. In August same year, he became the fifth person in the world to have a net worth of over $100 billion. This was again thanks to Tesla. In the same month, Tesla's market capitalization was more than $300 billion. At the time, Musk owned 21% of Tesla.
Richest person
Musk became the richest person in 2021
Musk became the world's richest person in 2021 when his net worth touched $190 billion. He took down Amazon founder Jeff Bezos, who held the spot since 2017, on his way to the top. He became only the second person to cross $200 billion in net worth after Bezos the same year. The year 2021 was good for billionaires but especially great for Musk.
Peak
He became the first person to cross $300 billion worth
In November 2021, Musk's wealth reached its peak. He was worth $340 billion, becoming the first ever person in the world to cross the $300 billion mark. The year 2022 was, on the other hand, a different one for Musk. His fortune ebbed and flowed between $200 billion and $300 billion. And his bid for Twitter in April changed a lot of things.
Fall
Musk's net worth has fallen by over $70 billion
In April 2022, Musk's net worth was around $260 billion. However, his current net worth, according to the Bloomberg Billionaires Index, is $185 billion. A big chunk of Musk's fortune has been wiped out by the fall in Tesla's shares. The acquisition of Twitter by Musk has affected investor confidence in Tesla as well. Tesla's market capitalization has almost halved since November 2021.