5 Reasons You Shouldn’t Look to Elon Musk for Money Advice
Written by
Angela Mae
Edited by
Amber Barkley
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Elon Musk is the world’s richest man with an estimated net worth of over $400 billion, according to Bloomberg. He’s the co-founder of multiple highly lucrative companies, including SpaceX, valued at $350 billion, and Tesla, valued at $1.3 trillion.
Given his success over the past few decades, you might think Elon Musk is the right person to turn to for money advice. But the truth is a little more nuanced. Like anyone else, Musk has made some notable financial mistakes along the way — he just has more money to be able to ride out those mistakes.
Here are six reasons why you might not want to look to Elon Musk for money advice.
Questionable Cryptocurrency Decisions
It’s no secret that Elon Musk has had some serious influence on cryptocurrency. Take dogecoin, for example. It started out as a cryptocurrency based on a meme back in 2013. But thanks to Musk’s encouragement, it went far beyond that.
In January 2021, dogecoin went up by about 800% in a 24-hour period. In May of that same year, Musk posted on X, formerly Twitter, that he was planning to launch the satellite Doge-1 to the moon using dogecoin to pay for said launch. He even changed the Twitter logo to the Doge dog, which resulted in the cryptocurrency gaining 30% overnight.
While a humorous enough joke, and a lucrative one for some, many people who jumped on the dogecoin train ended up losing money. Whether or not Musk did is somewhat irrelevant, considering how much he already has.
If you’re going to invest in cryptocurrency, be aware of the risk as well as the potential reward.
Creating an Unrealistic Basis
With such a high net worth, Musk has the opportunity to try out many different ways to make money without ever worrying much about the risks involved. Unless you’re someone with that kind of cash — or net worth — you might not want to toss yours around so casually. Taking calculated risks and making informed decisions, after all, tends to be a wiser strategy.
According to the U.S. Bureau of Labor Statistics, the annual mean wage in the U.S. was $65,470 in 2023. Even if you make closer to six figures — or even more — you might still need to be strategic with how you spend, save or invest your money.
The Twitter Debacle
Musk purchased Twitter, now X, for roughly $44 billion. Shortly after that, he turned it into a privately-held company. Because of this, it’s hard to say what its exact value is today. However, estimates put its shares at being worth 71.5% less than they were before Musk purchased it.
That’s a serious loss for most people. It’s also a potential sign of poor planning and impulse control. Musk has also frequently changed his mind about financial decisions, including the purchase of Twitter — which he attempted to back out of.
For the average person, changing your mind frequently and making financial decisions on a whim aren’t the wisest strategies. Elon Musk can afford the fallout. You’ll have to ask yourself whether you can, as well.
His Money Comes From His Businesses
Musk has made much of his fortune through business rather than investments. Business people tend to view finances differently from non-business people, and so they’re not always the best people to get financial advice from.
If you’re looking for someone to get business advice from, Musk might be worth listening to. Just know that he didn’t start out with nothing. His family owned an emerald mine in Zambia, so he grew up with more resources than the average person might have.
Everyone’s Journey Is Their Own
Ultimately, everyone’s journey is unique to themselves. Your financial situation might allow you to take bigger risks in a similar vein to Elon Musk and other highly affluent people. Or it might not.
Since everyone’s path is different, you should take other people’s advice with a grain of salt. As for attempting to replicate their decisions, only do so if you’re prepared for any outcome — good or bad. This means doing your research, consulting a financial advisor or other professional, if it makes sense for you, and taking the time to assess the risks involved with any investment or other big financial decision.
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