Regardless of what you think of Elon Musk, the man certainly knows money — after all, with a net worth that vacillates from $380 billion to $420 billion, he is currently the wealthiest human being on the planet. A great deal of that wealth stems from his ownership of the space tech company SpaceX and the automotive company Tesla.
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That said, not everything Musk has touched has turned to gold. He certainly has made mistakes along the way that have cost him financially. While Musk is in the enviable position to be able to afford such mistakes, that’s a luxury most people don’t have. As a result, Musk’s moments of money mismanagement can provide lessons for those who don’t happen to have the $400 billion safety net that he does. Without that buffer, many of his financial errors are things you’d likely not repeat. Right?
Here are five lessons you can learn from his money mistakes — unless you know better already.
Don’t Overpay
In 2022, Musk spent a whopping $44 billion for the social media platform Twitter (and changed the name to X). Following his takeover of the platform, the social media outlet was beset by technical problems, as well as controversial content issues. Musk later admitted that he was “overpaying for Twitter right now.”
Musk was so determined to acquire the platform that he appeared willing to pay almost any amount of money — a buyer’s instinct that can lead to financial disaster for those who can’t afford it. Sometimes a shiny object, be it a new car or new house, can be enticing, but almost nothing is worth overpaying and risking financial ruin or wasting your money.
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Avoid Risky Investments
When Musk purchased Twitter/X, it reportedly dropped in value by a shocking $25 billion. The Twitter value crash took Musk’s Tesla with it, dropping the automotive manufacturer’s stock value by 23%. The lesson here? As billionaire investor Warren Buffett once said, “Never invest in a business that you cannot understand.”
To that end, you could view Musk’s investment in the Donald Trump presidency as a wash — Musk reportedly spent $290 million to help return Trump to the White House in the 2024 election. While the gambit paid off, Musk’s involvement with the Trump administration led to Tesla’s stock dropping and an eventual messy public rift between Trump and the world’s richest man.
Keep Partner Disagreements Internal
Despite Musk previously being all in on the Trump administration (financially supporting Trump’s reelection, becoming “the First Buddy” to Trump, heading up DOGE), the two men had a very bitter and public split following Musk’s criticism of the president’s “Big Beautiful Bill.” Musk argued that the bill (which has since been passed into law) would massively increase the federal deficit while devaluing electric vehicle tax credits — and thus hurting Tesla.
This led to the two men trading insults over their social medial platforms (X for Musk, Truth Social for Trump) — the result of which was Tesla stock falling and knocking Musk’s net worth down by $15 billion. Trump also threatened to cut $38 billion in federal contracts for Musk.
Don’t Do Business With Family
In 2016, Musk’s Tesla acquired the solar energy company SolarCity — an outfit that was co-founded by Musk’s cousins. Tesla shareholders were critical of the move, which appeared to be a bailout orchestrated by Musk to assist SolarCity. Musk defended the move, calling it an investment in sustainable energy; meanwhile, Tesla shareholders balked and filed lawsuits, calling it a personal move rather than a business one.
Beware Messy Divorces
Musk has married two women, with both marriages ending in very costly divorces. His first divorce to Justine Musk ultimately cost him $20 million in a settlement, which reportedly includes $20,000 monthly in expenses.
Musk divorced actress Talulah Riley in 2012, settling the split with a relatively inexpensive (for him) $4.2 million payout. He remarried Riley a year later, but they split again in 2015 with a divorce settlement of $16 million — meaning Musk paid $40 million to end his marriages.
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This article originally appeared on GOBankingRates.com: Are You Smarter Than Elon Musk? If So, You Can Avoid His 5 Money Mistakes
