How much of all the money in the world does Elon Musk have?

Hello and thanks for downloading the more or less podcast. We're the programme that looks at the numbers in the news, illife, and betwixt the bank sheets of billionaires. An omni-symmic meal. Earlier this year, the South African-born tech tycoon, Elon Musk, briefly became the world's first trillionaire. And this prompted loyalist Stephen to get in touch with a question. After hearing that Musk had become a trillionaire, my daughter asked me how much of all the money in the world he had. For certainly not the first or last time, I couldn't answer. But thought the clever people at more or less would be able to work it out. We are indeed very clever here at more or less, but our expertise is mainly in Byzantine history. So, to find out more, we spoke to Robin Wigglesworth, author of a fabulous debt and journalist at the financial times. To answer Stephen and his daughter's question, we first need to know how much money there is in the world. There's a lot of money, actually. And you can slice and dice it in a thousand different ways, but the measure that most economists use is something called M2, which is quite jargony, but just means cash, you know, coins and notes floating around the world, and money that's in bank accounts and saving accounts and things like that. So, in essence, M2 money supply is what most people on the street would mean when they talk about money, the coins down the back of the sofa, the cash in your wallet, the money in your bank account, money that you can easily spend. And that's, you know, big. Just in the UK, we're talking well north of three trillion pounds. And globally, if you throw the US, Europe, China, Japan, you can probably cap to well over a hundred trillion pounds in money around the world. Now, it's difficult to put an exact number on the amount of money in the world. The value of currencies changes all the time, and countries banks have different definition of what counts as money, but well over a hundred trillion is a good start. And it's vague enough that it doesn't really matter if you're thinking in terms of dollars or pounds. So, that's how much money there is in the world. But how much is Elon Musk worth? And Elon Musk was a trillion year, at least on paper, just a few weeks ago, and now he's worth only $800 billion. So that's, you know, what he's worth now at the time of speaking, but it moves around a lot. We'll get into why it moves around a lot in a bit, but for now, it seems we have all we need to answer Steven's question. Supposing Musk's fortune is all in cash, how much of the world's money does he have? Well, $800 billion is roughly the equivalent of 0.8% of all global money supply. So, that's roughly how much of the world's money Musk would have. If all of his fortune were in cash, like a big Scrooge McDuck style swimming pool, trouble is it's not. Here's what Musk himself tweeted earlier this year. My net worth is almost entirely due to my ownership stakes in Tesla and SpaceX. I have less than 0.1% that is cash. That does make things more complicated. Well, the catch is that most of Musk's money isn't actually cash in the bank. It's not gold coins like a smile like hoarding can sleep on. It's actually the estimated value of his shares and companies like Tesla and SpaceX. And those prices, the value of those shares, they go up and down a lot all the time. Because Musk's worth is in shares and not money, their value is constantly changing. And it doesn't even reflect the amount of money that these companies make. It's important to remember that also that Tesla doesn't actually make that much money. And SpaceX actually loses money. But the stock market assigns them a huge value. Ergo Musk who owns a lot of those companies is worth a lot of money. But that doesn't mean he has that kind of cash lying around in gold coins or bank accounts. But couldn't he just sell those shares and then exchange them for money? Not quite. No, he can't spend it, unfortunately, for him. Because obviously if Elon Musk tried to sell a meaningful amount of those shares in Tesla or SpaceX, well, the value of those shares would plummet. Because people would be worried about the techno king of Tesla selling out his shares. So in many ways, the value is only how they're lost by Elon Musk sticking around. And if he were to sell all $800 billion worth, well, he wouldn't actually be able to realize anywhere close to that. I mean, he'd still be worth probably tens, if not hundreds of billions of dollars, but not 800 billion. What Musk can do is borrow money against those shares. And this is one of the ways he raised capital when buying Twitter, for instance. But he couldn't cash out all of his shares tomorrow. The way we need to think of Musk's fortune then is not in terms of money but wealth. You can think of money as being like your bank balance, but wealth includes the things you own. Every day things like your house, your car, steaks in multi-billion dollar space exploration companies. So let's start again with a new question. How much of the world's wealth does Musk own? Well, the global stock market, the whole jamboree, is probably worth around $150 trillion. That's Amazon, it's Google, it's HSBC, it's JP Morgan, it's Nova Nordisk. All stocks in the world put together is around $150 trillion. So Musk's shares in Tesla and SpaceX are worth less than a percent of all of the shares in the world, which honestly is still a huge amount, but shares aren't the only form of wealth. Then there's something called the global bond market, that's guilt. So that's how the UK government funds itself. There's treasuries in the United States, the corporate bonds, debts issued by companies. And you've put all that together, well that's even bigger, that's $200 trillion. And that can range from literally a bond issued by the Church of England to treasuries sold by the United States government. If you throw in bonds too, Musk's wealth becomes about a quarter of a percent of the combined stock and bond markets. And then you get to probably the biggest one, but the hardest one to measure. And that's the global real estate market, houses, offices, football stadiums, airports, infrastructure, things like that. And like I said, it's very, very, very hard to measure this. And you have to make a ton of assumptions. But people estimate that that's probably worth another $400 trillion or so. And that doesn't actually include a lot of land like the Saharas or the Himalayas or the Arctic, because how do we measure those? But all real estate that has a semi-sum legitimate price is $400 trillion or so. And let's not forget cash. And then there's the actual money supply. The cash, the coins, the pound notes in our wallets. And what we have in our savings accounts are deposit accounts. And that's another at least another $100 trillion more. And after adding all of that together, where does that leave us? You know, through all of that together, Musk is wildly unimaginably wealthy, but he's still probably only got 0.09% of global wealth depending on how you measure it. It is, of course, extremely complicated and difficult to measure the world's wealth. But as a rough estimate, there you have it. Musk owns about 1,000th of the world's wealth. To our loyal listeners, Stephen, we hope this answers your daughter's question. And that is all we have time for this week. Our thanks to Robin Wicklesworth, a journalist at the Financial Times, and author of a fabulous debt. The epic story of how bonds built the modern world. If you've seen a number you think we should take a look at, email us on more or less at bbc.co.uk. Until next time, goodbye.