It’s hard to admit, but we can all learn something from Elon Musk

This is not something I ever imagined I’d find myself saying, but I think we could all learn something from Elon Musk, particularly when it comes to money habits and ideology.

I know, I know. At first glance, it’s difficult to see what any of us normal people who pay mortgages, fly economy and budget for groceries each week have in common with the world’s richest living individual, but stay with me.

Musk’s personal fortune has plummeted by an estimated $US113 billion. Credit: Bloomberg

This week, Musk announced that after four months of serving as the unofficial BFF of President Donald Trump he is going to say goodbye to Washington and is stepping down from his role as a top government adviser. Like so many friendships between the mega-rich, it looks like the two have had an ideological falling out over … yep, you guessed it, money.

As you’ll no doubt remember, Musk has been a key fixture of the White House since Trump’s return thanks to his role as the head of the department of government efficiency (DOGE), where he and a bunch of young and extremely inexperienced tech bros (who called themselves “Muskrats” due to their idolisation of the Tesla CEO) attempted to cut down on “wasteful” government spending.

This included things like slashing 300,000 government jobs and cutting funding to research programs aimed at raising US literacy rates in schools.

When the Tesla CEO began talking about his plans for DOGE in October last year during the presidential campaign, Musk said the agency would be able to find “at least $US2 trillion ($3.1 trillion)” in cuts – a third of the entire US federal budget – which he saw to be “a target-rich environment for saving money”.

Challenging ourselves is essential if we want to understand our reasons for spending or saving.

By January, Musk had wound that estimate back, saying that $US2 trillion would be the “best-case outcome”, and that more likely, the cuts would be closer to the tune of half of that figure – $US1 trillion. This number, he said, would still be “an epic outcome”.

Now that he’s on his way out, Musk is saying his final DOGE cuts figure is actually closer to $US175 billion (though audits suggest the true figure is far less than this). In terms of delivering Trump the “savings” that were promised, it really is the Temu version showing up on his doorstep.

The personal finances of Musk in all of this aren’t great either. Since cosying up to Donald Trump, Musk’s personal fortune has plummeted by an estimated $US113 billion. Considering his net worth was still $US342 billion in April, he’s hardly struggling. But a 30 per cent drop in four months? Oof.

He also gave close to $US300 million to the Republican Party during the 2024 election campaign, and another $US20 million for a judicial race this year (in which his preferred candidate lost).

While his private companies such as Neuralink, SpaceX and XAI have already received or are in line to receive huge funding boosts (namely from federal government contracts – what a coincidence), Tesla has tanked.

As Musk’s only publicly traded company, Tesla’s stock has dropped by as much as 33 per cent, and the company has lost an estimated $US448.3 billion in market value since Trump’s inauguration.

All of this brings me to the financial takeaways from this utterly bizarre, chainsaw-wielding era of history. When trying to save money, usually with the end goal of generating long-term wealth for ourselves and our family, it’s easy to become hyperfixated on a specific idea or belief.

A lot of the time, we don’t even realise that’s what we’re doing or where these beliefs came from, but our short-term, spontaneous actions can have unintended long-term consequences.

Take Musk and DOGE as an example. For whatever reason, he assessed the landscape and decided that jobs and research were easy savings opportunities.

While that might look good to the bottom line on paper, it’s hardly a saving if the next generation of Americans can’t read or write, or if there’s no vaccine available for the next COVID-19 equivalent because research funding was cut.

By the same token, how often have you bought something on sale and told yourself you’ve saved money by doing it that way? If you weren’t planning to buy the item before it went on sale, you’re not saving money.

You’re also not saving money if you make a coffee at home and then spend triple that amount on UberEats. You’re not saving money if you cancel your health insurance and then have to pay a huge out-of-pocket expense when you get sick. You’re not saving money if you don’t have income protection, but then lose your job. I could go on.

This might sound harsh, but challenging ourselves is essential if we want to understand our reasons for spending or saving the way that we do and to get better at it.

Yes, we might feel like shopping only at sale time is savvy, but if we end up spending money that would have otherwise been in savings or could have been invested, we’re just shooting our future selves in the foot.

Because here’s the thing: Musk seems to have genuinely thought his slashing would amount to real long-term savings. Instead, the DOGE cuts have affected the share value of Tesla, and by extension his personal wealth. They’ve also affected any potential future earnings thanks to the damage his Washington stint has done to his reputation.

In being driven by a belief that public servants are inefficient and ineffective, he convinced himself that there were savings to be found, even when there weren’t – or at least not in any meaningful sense.

Now, any prospective short-term balance sheet gains have major long-term pain attached to them for him. Instead of being a saviour to Trump or a hero that people can aspire to be, he’s become a global cautionary tale of what not to do.

Then again, if someone had to financially fail so that the rest of us can learn from their mistakes, it might as well be the richest person in the world.

Victoria Devine is an award-winning retired financial adviser, bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and director of Zella Money.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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