Tesla CEO Elon Musk beat out Microsoft co-founder Bill Gates to become the second-richest person in the world on Tuesday.
Shares in the electric car maker surged after the Trump administration said Monday it had started the transition process to President-elect Joe Biden — a clean energy advocate.
Musk’s net worth has grown by an estimated $100 billion since the start of the year, propelling him ahead of Gates for a few hours before settling into a tie, with both fortunes listed at $128 billion, according to the Bloomberg Billionaires Index.
Musk's massive personal fortune comes mostly from owning 20 percent of Tesla and 54 percent of his space transportation company SpaceX.
Earlier this year, the 49-year-old tech pioneer announced that he was going to sell almost all of his “physical possessions” and “own no house,” saying he no longer wanted to be attacked for being a billionaire.
"In recent years, ‘billionaire’ has become a pejorative. It’s like that’s a bad thing,” Musk told podcast host Joe Rogan in May. He has sold and put some of his California properties on the market since then, Forbes reported.
“I have a bunch of houses, but I don’t spend a lot of time in most of them," Musk told Rogan. "That doesn’t seem like a good use of assets. Somebody could probably be enjoying those houses and get better use of them than me.”
Gates would still be ahead of Musk if it weren’t for his philanthropic endeavors. Gates and his wife, Melinda, have donated close to $50 billion over the past 25 years, according to the Chronicle of Philanthropy. Musk has given away around $100 million.
Although $54 billion still separates Musk from the No. 1 spot — held by Amazon founder and CEO Jeff Bezos, whose fortune is listed at $182 billion — Tesla’s debut on the S&P 500 index next month could narrow that margin. Tesla hit a $500 billion market capitalization for the first time on Tuesday, and Musk's net worth has jumped nearly $20 billion in just the last week.
The tech sector has prospered throughout coronavirus-induced lockdowns, with stocks such as Amazon surging by close to 100 percent since the beginning of the pandemic and Netflix's market capitalization growing by around $100 billion.
Bezos's personal fortune grew by $67 billion in the last year, and his ex-wife was for a short time the richest woman in the world earlier this year. As part of her divorce, MacKenzie Scott, a novelist and philanthropist, received a 4 percent stake in Amazon.
Yet the Bloomberg Billionaires Index also highlights the growing socioeconomic gap between Wall Street and Main Street in America.
From 1989 until 2016, the wealth gap between the richest and poorest families in the U.S. more than doubled, according to Pew Research Center, a trend now exacerbated by the pandemic. As CEOs such as Musk and Bezos continue to see their fortune increase, small-business owners and millions of unemployed Americans are struggling to survive the economic crisis wrought by the pandemic.
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While most of the billionaires on the Bloomberg list generate their wealth from shares and not their annual salary, the growing wage gap between chief executives and workers has been a bone of contention for decades.
It has even sparked an "overpaid executive tax," passed in San Francisco this month. Formally known as Proposition L, the ruling will levy a tax on any company that does business in San Francisco and has a top executive earning over 100 times more than its “typical local worker."
Companies with top executives who fall into this category must pay a 0.1 percent surcharge on their annual business taxes. The surcharge increases by 0.1 percent per factor of 100, topping out at 0.6 percent.
Elon Musk currently makes nearly 2 million times as much as the average American household, while Jeff Bezos currently makes 2.6 million times as much, according to Bloomberg.