How Musk Grew Tesla to $1 Trillion: Lessons for Building Wealth Despite the Odds
Written by
Andrew Lisa
Edited by
Zuri Anderson
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The stock market soared in the wake of President-elect Donald Trump’s Nov. 5 victory, but no individual benefited more from his defeat of Vice President Kamala Harris than Elon Musk, one of Trump’s top donors and surrogates.
According to Forbes, news of the GOP victory sent Tesla shares soaring, and on Nov. 8, the company’s market value eclipsed $1 trillion for the first time since 2022, making the richest person in the world even richer.
Musk’s personal fortune eclipsed $300 billion for the first time and Forbes estimates his current net worth at $304 billion.
Those who aspire to become centi-billionaires like Musk — or even just garden variety millionaires — could invest in Tesla or other stocks and hope the company and the broader market prevail.
Or, they could study the business magnate’s rise to fame and fortune and apply those lessons to their own journeys to financial freedom.
Join the Ranks of America’s Entrepreneurs
Some people who weren’t born into money get rich through stocks, real estate or other traditional investments, but Musk knew early on that in America, entrepreneurialism is the surest path to wealth.
Research from Zippia found that nearly nine out of 10 self-made millionaires built their fortunes by starting businesses.
Plenty of investors have struck it rich by buying Tesla shares, but their wealth is couch cushion money compared to that of the man who brought the company to life. You want to get rich? Do what Musk did — build a business.
According to Forbes, there are six primary reasons why businesses are the ultimate wealth-generation machines:
- Unlimited potential revenue: Unlike employees, who are relegated to the confines of maximum salaries, entrepreneurs like Musk have no limits on how much revenue their businesses can generate. That’s because they have the power to set prices, control production volume, reach out to new customer bases and expand their operations.
- Compound wealth-building: Business owners can reinvest their profits back into their companies, allowing them to scale their operations and pursue exponential growth.
- Asset appreciation: Businesses aren’t just income streams. They’re also financial assets whose market values grow as their profitability increases.
- Tax benefits: Business owners enjoy favorable tax treatment that allows them to deduct expenses and re-invest the savings into further business growth.
- Entrepreneurialism breeds financial acumen: Business owners have to manage company finances, reduce expenses, find savings wherever they exist, navigate complex tax issues and take calculated financial risks. Many founders start businesses that go on to fail, but even their efforts earn them priceless financial education that will serve them in their lifelong wealth-building journeys.
- Autonomy and control: Unlike employees, entrepreneurs hold the reins and wield the decision-making power to determine their financial futures — and no one can fire the boss.
Put in the Work
Whether you decide to build your own business, climb the corporate ladder or do anything in between, there is simply no substitute for hard work. If you want to get rich, you’re going to have to put in the hours.
Elon Musk’s otherworldly work ethic and relentless pace are the stuff of corporate legend, with Inc. reporting that he puts in 80- to 100-hour workweeks every week. Most people — or at least those who value a minimum standard of sleep and free time — couldn’t sustain that schedule and wouldn’t want to even if they could.
However, the typical 40-hour workweek is likely to deliver typical results — and typical results never made anyone rich. Inc. cited Harvard research that showed the average CEO of a multibillion-dollar corporation works 62.5 hours per week, roughly halfway between normal and Elon.
Concentrate Your Resources Where They’ll Do the Most Good
According to Medium, Tesla spends exactly $0 on marketing and advertising. That’s because Musk believes that every dollar a company spends on marketing its product is one it can’t spend on improving that product.
Musk makes all spending decisions by answering one question, per Forbes. The publication quotes Musk as saying, “Will this activity result in a better product or service? If not, I stop those efforts.”
Musk shuns advertising because, in his estimation, Tesla’s success depends on its ability to create the best electric car in the world. If the company does that, word-of-mouth advertising will spread the message for him.
A 2022 report from StockApps found that Tesla spends more on research and development than any other automaker, spending $2,984 on R&D per car produced. That’s three times the industry average of $1,000 per car and more than the collective R&D budgets of Chrysler, GM and Ford per car.
So, what’s the lesson?
Ignore conventional wisdom and put all your eggs in the one basket that has the best shot at success. Instead of trying to invest, launch a side hustle and build a business, pick the one endeavor that is most likely to succeed and pour all your energies and resources into that.
Put All Available Dollars Into Earning More Dollars
According to Statista, Tesla, founded in 2003, didn’t achieve its first year of profitability until 2020. That’s because it reinvested nearly all of its profits into research and development.
However, even those who never launch a business can apply the same principle to their own efforts at wealth generation, even if they’re just buying S&P 500 ETFs.
For example, Forbes used data from Nobel Prize-winning economist Robert Shiller to determine that the stock market’s average annualized return since 1971 is 7.58%.
However, those who followed Musk’s lead and reinvested their dividends instead of harvesting them as profits enjoyed 10.5% returns over the same period.
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