According to Informa Connect Academy, Space X boss Elon Musk is on track to become the world’s first trillionaire by 2027. Among billionaires, Musk’s fortune is closest to 13 figures and is growing steadily.
According to the Bloomberg Billionaires Index, Musk was only worth about $28.5 billion at the beginning of 2020. By the end of that year, the SpaceX boss’s fortune had increased to about $167 billion, and as of September 2024, the entrepreneur’s net worth is estimated at about $265 billion.
The biggest source of Musk’s wealth is Tesla stock, which has skyrocketed during the Covid-19 pandemic. Tesla stock hovered around $30 a share in January 2020. By January 2021, the electric carmaker’s stock had skyrocketed to nearly $300 a share.
The Bloomberg Billionaires Index estimates Elon Musk’s fortune at around $265 billion and growing.
“If you look at the list of the richest Americans, whether we’re talking about Elon Musk or Jeff Bezos, the reason people get super rich is they start a company and try to grow that company,” said James Pethokoukis, an economic policy analyst at the American Enterprise Institute.
“The reason that company continues to grow and grow is that it is creating something of value that people want,” said Mr. Pethokoukis.
The wealthiest individuals typically invest the majority of their wealth in the stock market, while middle-income households tend to invest more in real estate.
According to Federal Reserve data, as of mid-2024, the richest 1% of Americans owned nearly 50% of all US stocks, while the poorest 50% of Americans held only about 1% of all stocks.
About 58% of households owned stocks in 2022, either directly or indirectly through passive investments like retirement accounts.
“Wealth inequality is largely driven by the prices of different assets,” said John Sabelhaus, a fellow at the Brookings Institution. “One of the things that will increase wealth inequality when measured is the stock market.”
Musk’s other company, SpaceX, has just been granted permission by the US Federal Aviation Administration to launch the Starship 5 spacecraft.
There is also debate about the role taxes play in contributing to wealth inequality in the US. While some, including Pethokoukis, argue that large compensation packages are a reward for creating a successful company, others, like Sabelhaus, argue that loopholes in the tax system create a level playing field.
“Especially over the past quarter century, changes in tax policy have made it much harder to tax the rich. There are more exceptions, more ways to avoid paying taxes,” Mr. Sabelhaus assessed.
Many Americans earn their income primarily by trading their time and skills for wages, which are taxed based on how much an individual earns. On paper, the income of the super-rich is not entirely clear.
“If we think about income as a kind of improvement in a person’s spending power over time, you and I both have paychecks. And those paychecks measure how much we can spend. But for someone as rich as Musk, only a small portion of that income is considered taxable income because most of it is bonuses and other forms of pay that are easy to avoid taxes,” Sabelhaus added.
