How to become a trillionaire
Hi, I'm Mirko, a co-founder of Datawrapper and an innovation manager, currently focused on language tech. Last Friday, SpaceX went public, and Elon Musk became the first person ever worth a trillion dollars. This week, we look not at how much that is, but at how long it took, and what "worth" really means at this scale.
The numbers from Friday's IPO are big. SpaceX, initially priced at 135 dollars per share, jumped to 150 as soon as markets opened, and touched 175 before closing at 161 dollars. That closing price put the value of the company at around two trillion dollars and Musk's own fortune at roughly 1.1 trillion1. The listing alone added more than 180 billion dollars to his net worth in a single day.
He is now worth more than the next five richest people combined, and more than the entire economic output of Sweden in a year.
For most of his career, Musk was not that rich by billionaire standards. In 2008, he was nearly broke and borrowing money for rent. In early 2020, he was worth about 25 billion dollars. Then the line goes up, nearly vertical. Almost all of his fortune was built in the last six years. Wealth at this scale doesn't add up slowly. It gets repriced all at once, and on Friday, it was repriced again.
Now, the part that is easy to miss: Almost none of it is money.
The lower line is the cash Musk has actually received in his life: from selling Zip2, from selling PayPal, and from selling Tesla shares in 2021 and 2022. About 39 billion dollars, before tax. Next to a fortune near a trillion, it barely registers. And most of that was already spent, on an 11-billion-dollar tax bill and on buying Twitter. The IPO did not change this. It put a public price on his SpaceX stake, but he did not sell. That trillion exists only on paper.
A trillionaire here is not someone who has one trillion dollars. It is someone who owns big slices of companies that the market values in the trillions. Tesla made Musk rich. SpaceX made him the richest. But both companies are only worth as much as the next trade says, which is why his fortune has already moved by more than a hundred billion dollars between Friday lunchtime and the closing bell.
This is also why his taxes look the way they do. Unsold stock is not income, so it is not taxed. On the income he did report between 2014 and 2018, Musk paid a fairly normal rate, around 30%. Measured against how much his wealth grew in those years, ProPublica put his "true tax rate" at about 3 percent. In 2018, he paid no federal income tax. Yes, it is all legal, and also why a wealth tax keeps coming up.
A word on what this piece is not: That so few people can hold so much wealth is worth a serious debate. So is whether they use that power responsibly. Both questions matter, but neither is the focus here.
So, how do you become a trillionaire? Own a big enough piece of something the world decides is worth trillions, and don't sell.
One number, two names
Calling Musk a "trillionaire" may be clear in English, but it is confusing in almost every other language.
The world uses two systems for naming large numbers. The short scale climbs by a factor of a thousand at each step. A billion is a thousand million, written 10⁹. A trillion is a thousand billion, 10¹². This is used in the United States, the United Kingdom2, most of the English-speaking world, and also in Brazil.
The long scale climbs by a factor of a million. A billion is a million million, 10¹². The step at 10⁹ gets its own word, "milliard." This is used across most of continental Europe, including Germany, France, Italy, and Spain, and in much of Latin America.
So the same word can point to very different numbers:
For a German reader, Musk's "one trillion dollars" is eine Billion Dollar, not eine Trillion. A German Trillion is a million times larger, and nobody is anywhere near it. So the English "trillionaire" is, at least in German, “only” a Billionär.
That's it for today! Come back next week for a Weekly Chart from Shaylee.
