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Source: Tesla

Tesla Model 3

Why Is Elon Musk So Rich?

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Elon Musk, the South African-born entrepreneur who is known for founding Tesla and SpaceX, just surpassed Bill Gates to become the second-richest person in the world. Musk’s net worth has grown by over $100 billion in 2020, which brings his net worth to nearly $128 billion, according to NPR.  

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Musk, who started his career in the tech industry in California in the 1990s, was one of the founders of PayPal. When eBay purchased PayPal in 2002, Musk’s wealth grew quickly. The same year, he founded the space exploration company SpaceX. Growth in Tesla stock this year helped Musk reach the second spot on the Bloomberg Billionaires Index.  

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Source: Getty Images
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Elon Musk is the second-richest person in the world

Recently, Bill Gates was second on the list of the world’s richest people. A record-breaking Dow Jones Industrial Average of over 30,000 points combined with skyrocketing Tesla prices sent Musk ahead of Gates on the list of the world's richest people.  

NBC News reported that Musk owns 20 percent of all Tesla stock and 54 percent of SpaceX. His stock holdings make up most of his wealth. According to Bloomberg, Musk earns almost 2 million times as much as the average American household, while Jeff Bezos earns 2.6 million times that figure.  

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How did Elon Musk become rich?

For a long time, Elon Musk has been a leader in the technology and innovative transportation industries. He started a payment services company, X.com, that would eventually become PayPal in the late 1990s. The sale of PayPal to eBay brought him $165 million.  

Musk is part of the PayPal Mafia, which is a group of former PayPal executives who went on to found some of the most profitable startups after leaving that company.  

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The primary drivers of Musk’s wealth are his stock holdings in Tesla and SpaceX. SpaceX was founded in 2002 with the purpose of making commercial space travel a reality. The company launched its Falcon 9 rocket in 2012. In 2018, the government allowed SpaceX to pursue the Starlink venture to build a network of satellite Internet providers in space. 

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Tesla, Musk’s electric car manufacturer, is the most valuable carmaker globally. However, Tesla produces a fraction of the number of vehicles of its competitors like Toyota, Volkswagen, and GM. Its Model 3 is the bestselling luxury car in the U.S. Recently, Tesla had five consecutive profitable quarters. 

Soon, Tesla will be added to the S&P 500 with a total market value exceeding $500 billion. Cleaner energy and electric vehicles are expected to perform well in the near future as governments worldwide seek to combat climate change.   

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Who’s the richest man in the world?

Currently, Amazon founder and CEO Jeff Bezos is the richest man in the world. His net worth is about $182 billion. Amazon stock has grown throughout the COVID-19 pandemic as more people moved to online shopping. The success led Bezos to grow his net worth by about $67 billion over the past year.  

Bill Gates was the richest man in the world until 2017 when Bezos overtook him for the first time.  

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