“A networth of $400-billion doesn’t mean I have $400 billion in my bank account. I don’t even have up to $1-million in cash now.” ~ Elon Musk

One time, Elon was questioned about what it feels like to be a Billionaire and he said he still borrows money like every other person, asks investors to invest in his businesses because he doesn’t have all the cash to fund his projects despite his network. And yes, he said his entire wealth is tied to the stock he holds in his companies. This also serves as a guarantee to investors because they know that if the company goes bankrupt, then Elon himself will go completely bankrupt too. He sacrificed having cash for the growth of his company.

In fact, he is quoted as saying “I get annoyed when I see the kind of mindsets people have about rich people, especially billionaires. People feel so threatened by rich people’s success that they tend to use rich people’s success as an excuse for their failures.

Most people don’t yet understand the concept of wealth. Yes, I am worth over $300 billion but it’s not like I have a massive account balance of $300 billion or something. My account balance is very, very low. I don’t even have up to $1 million in my account right now. All my money is in stock and when I sell my stock, I still invest in more stock. My wealth is my companies. If Tesla or Space-X went bankrupt, I’ll go bankrupt too, immediately. And even with my networth, I still take loans and invest because I don’t actually have physical cash.”

Me: Whether this is true or not, the lessons are definitely accurate because this is the accurate description of networth and how it is different from liquidity.