According to a recent report from Informa Connect Academy, Elon Musk is on course to become the world’s first trillionaire by 2027. Among all billionaires, Musk is the closest to achieving this 13-figure milestone, and his wealth continues to expand.
According to the Bloomberg Billionaires Index, Musk’s net worth was approximately $28.5 billion at the beginning of 2020. By the end of that year, it had surged to around $167 billion. Moreover, as of September, according to the same index, his net worth was estimated to be roughly $265 billion.
Elon Musk: A Trillion-Dollar Goal
The primary catalyst for Musk’s wealth accumulation has been Tesla stock, which experienced a significant rally during the Covid-19 pandemic. In January 2020, Tesla shares were trading around $30 per share. However, by January 2021, the stock price had skyrocketed to nearly $300 per share.
“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 they grow that company,” said James Pethokoukis, economic policy analyst for the American Enterprise Institute.
“And the reason that company keeps growing and growing is [it’s] producing something valuable that people want,” Pethokoukis added.
High-net-worth individuals generally allocate a larger portion of their assets to the stock market compared to middle-income households, who tend to concentrate their wealth in real estate.
According to Federal Reserve data from mid-2024, the top 1 percent of Americans hold almost 50 percent of all U.S. stocks. In contrast, the bottom 50 percent of Americans own approximately 1 percent of the total stock market.
Implications for Wealth Inequality
In 2022, approximately 58 percent of families had a stake in the stock market, either directly or indirectly through passive investments like retirement accounts. “Wealth inequality is very much driven by the prices of different types of assets,” said John Sabelhaus, a fellow at the Brookings Institution.
“One of the things that will cause wealth inequality to go up as measured by wealth concentration is the stock market,”Sabelhaus said.
The role of taxation in exacerbating wealth inequality is a subject of ongoing debate. While some, including Pethokoukis, contend that substantial compensation packages are a just reward for building successful companies, others, such as Sabelhaus, argue that loopholes in the tax system create an uneven playing field.
“Over the past quarter century in particular, changes in tax policy have made it much more difficult to tax the rich,” Sabelhaus said. “There are many more exclusions, many more ways to get around paying taxes.”
While most Americans earn their income primarily by trading their time and skills for a paycheck, which is taxed based on individual earnings, the income sources of the ultrawealthy are often less straightforward.
“If we think about income as being sort of the improvement in one’s ability to spend over time, you and I have paychecks. And those paychecks measure how much we can spend,” Sabelhaus said.
“Musk … has a gigantic compensation package. But even that package, only a fraction of it shows up as taxable income because much of it is in bonuses and other ways of getting paid that make it easy to avoid taxation,” he added.
Musk’s rapid wealth accumulation raises the tantalizing prospect of him becoming the world’s first trillionaire by 2027. However, achieving this milestone depends on various factors, including the continued success of Tesla and other ventures.
