Fri. Feb 3rd, 2023


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What made Elon Musk join the ‘homeless billionaires’ club?

5 min read

The SpaceX founder has become part of a rare group of super-high net worth individuals who are far more comfortable living the simple life.

It’s generally considered foolish to take Elon Musk’s tweets as gospel. His followers know this, his critics know this, Tesla’s shareholders know this and the federal jury at his defamation trial two years ago definitely knows this (he was found not liable after being sued by a British cave expert he had called a “pedo guy”).

So when, on May Day last year, Musk broadcast the following to his 60-odd million Twitter followers, nobody really expected him to stay true to his word: “I am selling almost all physical possessions. Will own no house.”

Ah, there goes Elon, we thought. At the time, Musk, the second wealthiest man in history, owned at least six houses in California alone, had a property portfolio worth US$100 million ($144 million) and, in addition to real estate, presumably had a few other “physical possessions” – such as his own inventions.

Yet 15 months on, he’s put his ever-increasing money where his mouth is. Slowly but surely, all but one (a 16,000 square foot mansion just south of San Francisco he still uses for events) of those California properties has sold – mainly to people who will actually enjoy them.

One was Gene Wilder’s former home, which Musk had never lived in but had reportedly used as a super-exclusive private school codenamed “AdAstra” for his children and those of Tesla and SpaceX high-ups. He had stipulated that the place “cannot be torn down or lose any [of] its soul”, and has since sold it to Jordan Walker-Pearlman, Wilder’s nephew, and his wife. Records suggest he made no profit and actually lent the couple US$6.7 million ($9.6 million) to buy it.

Today, Musk, 50, owns no home of his own. Instead, he’s living in a small prefab, rented from SpaceX, in Texas. It is 375-square-foot and cost US$50,000 ($72,000). “It’s kinda awesome though,” said the man who, between April 2020 and April 2021, made US$383,000,000 ($550,297,000) per day on average.

The decision means Musk – who is now girlfriendless as well as homeless, having recently “semi-separated” from the musician Grimes – has joined a rare group of super-high net worth individuals far more comfortable accruing money or giving it away than living a typical billionaire’s lifestyle.

“In some ways, possessions weigh you down,” Musk said last year when asked about his status as a “homeless billionaire”. “And also, I just have all these houses but nobody is using them.”

Grimes – with whom he shares an 18-month old son, X Æ A-Xii, known as “X” (he also has six other children) – reportedly wanted him to keep hold of at least one home, but he wasn’t keen on rattling around a cavernous, opulent mansion just because he could.

“I have been staying in this strange Gatsby-like house, what I call the haunted mansion, and it’s a bit bleak, to be totally frank,” he said. “The house itself is beautiful but, you know, it’s like Wayne Manor without Alfred.”

Leaving aside that curious Batman metaphor, the sense of futility Musk expresses at owning so much is familiar to other billionaires who’ve let go of it all.

Perhaps the most famous member of the “homeless billionaires” club is Nicolas Berggruen, the Paris-born investor who turned his US$250,000 ($360,000) trust fund into a fortune of more than US$2 billion ($2.87 billion) through buying property and stakes in companies such as Karstadt, the German retailing group, and Prisa, the Spanish media conglomerate that publishes El País and owns Le Monde. As Berggruen accrued that wealth through the Eighties and Nineties, he also furnished his life with all the usual trappings: flashy cars, massive houses, priceless art.

Then, in 2000, he grew tired of it all. The art went to museums, the cars were returned, the houses sold. Berggruen relieved himself of most of his possessions, save for a few essentials like his Gulfstream IV private jet.

“If you have things and if you are a perfectionist, which I am, you have to really tend to them and it takes energy away from other things,” Berggruen said, employing the same less-to-think-about logic Mark Zuckerberg uses to validate wearing the same outfit every day. “I understand the human instinct to want to create a nest and possess things, to show them off. But for me personally, it became less and less interesting.”

Being a man means “you don’t need as much”, he said in an interview in 2012, conducted at the five-star Carlyle Hotel in New York where he was staying at the time. “I have very few possessions… a few papers, a couple of books, a few shirts, jackets, sweaters. It fits in a little thing, in a paper bag, so it’s very easy.”

Living in hotels is practically a cliché when it comes to the loneliness of wealth. Robert de Niro at the Chateau Marmont, Salvador Dali at the Meurice, Dylan Thomas at the Chelsea Hotel, Coco Chanel at The Ritz, Alan Partridge at the Linton Travel Tavern.

Five years ago, Berggruen, now 60, had two children using an egg donor and two separate surrogates, so put very expensive roots down in Los Angeles.

First came a sprawling 1920s mansion above the Sunset Strip, then a US$41million ($59 million) estate once owned by Louis B Mayer’s daughter, then the estate next door and, earlier this month, US$63.1million ($90.6 million) for William Randolph Hearst’s estate in Beverly Hills – thought to be the highest price ever paid for a house at auction. The house was in The Godfather and The Bodyguard and is rumoured to have been John F and Jackie Kennedy’s honeymoon spot.

Berggruen’s about-turn might be a harbinger for Musk: eventually the lure of a property portfolio, and the ease with which you can have one, becomes too much. After all, even notoriously generous billionaires like US business magnate Warren Buffet – who set up The Giving Pledge with Bill and Melinda Gates in 2010 to encourage wealthy people to give the majority of their money to charity – possess homes, even if, in Buffett’s case, it’s a bog-standard five-bed in Omaha he paid US$31,500 ($45,000) for in 1958.

“How would I improve my life by having 10 houses around the globe? I don’t want to manage 10 houses and I don’t want somebody else doing it for me and I don’t know why the hell I’d be happier,” Buffett told the BBC.

Whether Musk is being charitable or simply plunging every last penny into his Mars missions isn’t fully clear, but if it’s the former, there is at least one role model left. Buffett’s friend and fellow philanthropist, Chuck Feeney, also pledged to rid himself of his wealth and possessions – and he’s almost done it. Feeney , the cofounder of retail giant Duty Free Shoppers, has spent the last four decades donating US$8 billion ($11.5 billion) to charities, universities and foundations, and is intent on dying broke. Today, aged 90, he has no car or luxuries, wears a plastic US$15 watch and lives with his wife, Helga, in a small rented San Francisco apartment that “has the austerity of a freshman dorm room”.

Feeney, the true “homeless billionaire”, has often been asked why he did it, when so few others feel the same urge. He always has the same reply: “It was the right thing to do.” Your move, Elon.

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