Elon Musk, by many standards the most successful entrepreneur of modern times, had a net worth of about $220 billion as of June 2022. At the beginning of the year, his net worth had almost surpassed $300 billion before Tesla’s (NASDAQ:TSLA) stock began to fall from all-time highs along with the rest of the market.

A natural question among investors is where Musk chooses to invest his money. We take a look at the investments Musk owns (and the companies he starts), the type of investments he avoids, and what investors should know about his strategy.

Elon Musk’s investment strategy

Elon Musk’s investment strategy is rather simple, at least as far as he has made it public. His investments can be divided into two general categories: companies he founded or controlled and cryptocurrencies. Unlike many other billionaires, Musk does not have a large portfolio of publicly traded shares in companies in which he is not involved on a daily basis.

That changed after it was revealed that Musk took a 9.2% stake in social media platform Twitter (NYSE:TWTR) in early April 2022. Twitter’s market value was just under $31 billion, so his stake represents a small percentage of his overall net worth (1.3% to be exact, assuming his net worth is $220 billion). He is currently Twitter’s largest shareholder.

A day after the revelation of the share purchase, Musk was offered a seat on Twitter’s board of directors. The offer was turned down, as shortly afterwards Musk offered to buy the company and take it private for $44 billion. Although Twitter’s board accepted the offer at the end of April, there have been numerous back-and-forths between the company and Musk over the number of bots (accounts that are not real people) on Twitter, among other issues.

But Musk has stated that his main initiatives include promoting free speech and adding an edit button.

Apart from Twitter, Musk’s investments are highly concentrated in his business ventures. The first category includes investments in publicly traded stocks, while the second includes private companies he has founded and continues to invest in. In this regard, here is a summary of what we know about Musk’s investments.

Elon Musk’s investments in publicly traded shares

Besides Twitter, the only other major publicly traded equity investment that Elon Musk owns is the electric vehicle giant Tesla. Musk was an early investor, having led the Series A funding round, and was one of the company’s first employees. Musk accumulated a majority stake and took control of the company in 2008.

As of June 2022, Musk owned almost 163 million Tesla shares, or about 17 per cent of the company, which is currently worth about $142 billion. He also has a Tesla compensation package that pays him exclusively in company stock, so his ownership could certainly increase over time. In fact, even after selling and disposing of nearly $22 billion of Tesla stock at the end of 2021, Musk’s stake in the leading electric vehicle manufacturer has increased through stock options.

Thanks to a 10-year remuneration package approved by Tesla’s board of directors in 2018, Musk’s only compensation is in tranches of annual performance-based stock options. He has already reached the most aggressive target (a market capitalisation of $650 billion by 2028), so at each of the vesting dates, Musk will receive options to buy 8.44 million additional shares at very low prices (assuming Tesla’s market capitalisation remains above that threshold).

It is worth mentioning that Musk co-founded X.com, which eventually became PayPal (NASDAQ:PYPL) in the dot-com boom era. He was CEO of PayPal until 2000 and at one point owned almost 12% of the company’s shares. However, he no longer has a stake in PayPal, although he owned some before the company was acquired by eBay (NASDAQ:EBAY) in 2002. He received more than $100 million for his stake after he cashed it in. Today Musk’s stake in PayPal would be worth billions, but given that he used the proceeds to fund Tesla and SpaceX in the early days, it is hard to argue that cashing out was a bad move.

Elon Musk’s private equity

Musk has founded and still controls several companies, but SpaceX is by far the largest. He owns around 44% of the space exploration technology company, which was valued at around $127 billion in a May 2022 funding round.

With a combined value of almost $200 billion, Musk’s holdings in Tesla and SpaceX make up the bulk of his net worth. He often describes himself as ‘cash poor’, as most of his wealth is tied up in his companies.

In addition to SpaceX, Musk also owns the majority of other private start-ups he has founded or co-founded. For example, he owns most of the tunnel engineering company The Boring Company, the neurotechnology start-up Neuralink and the artificial intelligence research operation OpenAI.

Elon Musk’s cryptocurrency investments Although we do not know the exact amounts he owns, we do know that Musk is an investor in cryptocurrencies, both through the companies he controls and personally. He has spoken openly about some of his favourite digital assets, most notably Dogecoin (CRYPTO:DOGE).

Musk has also revealed that he owns Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH), although he has stated that the Bitcoin he owns is worth much more than the Ethereum or Dogecoin he owns. Tesla and SpaceX also own significant amounts of Bitcoin. Although we know that Tesla owns about 42,000 Bitcoins (worth about $1.3 billion in June 2022), we do not know how much cryptocurrency Musk personally owns.

Shares that Elon Musk does not buy

Although we do not know every single detail of Musk’s investment portfolio, we do know that most of his shareholdings are in public and private companies that he controls. He has no known equity positions in other companies.

However, we must put an asterisk on this point. Musk is not a hedge fund manager and is not required to disclose relatively small investments. It is entirely possible that he has small investments in publicly traded stocks that we are not aware of.

How to invest like Elon Musk

If you want to invest like Elon Musk, the first thing to do is to buy Tesla shares, which make up the majority of the billionaire’s net worth.

Of course, the private equity part of his portfolio is a hindrance. You cannot buy shares in SpaceX or The Boring Company on the public market and most people are not able to participate in the financing rounds of these companies. The best thing to do is to find publicly traded companies with a similar goal: for example, many investors have called Rocket Lab USA (NASDAQ:RKLB) the closest thing to SpaceX on the public markets.

Finally, while it would be easy enough to follow Musk into cryptocurrencies, there is one important thing to keep in mind. Having a literal billion-dollar fortune, Musk’s risk tolerance dynamic is very different from yours. In fact, it is likely that his goals are less about balancing investment growth and risk management and more about building companies in line with his personal goals and image.

In other words, Musk could lose $1 billion on Dogecoin tomorrow and still remain incredibly rich. Remember that you (probably) cannot afford to lose $1 billion before pulling the trigger on a cryptocurrency investment or any other type of investment just because a rich and/or famous investor bought it. Even Musk himself has advised investors not to put too much money into cryptocurrencies.

The point is that although Elon Musk is very rich, most of his net worth is tied up in one stock (Tesla and, more recently, a small stake in Twitter) and private companies that you or I probably cannot invest in. Besides buying Tesla shares, if you want to invest like Elon Musk, becoming an entrepreneur might be the best way to emulate his style.