Elon Musk’s wild wealth swings reveal why paper fortunes are not the same as real money — and why wealth taxes are a dangerous idea.

Elon Musk has created — and lost — more paper wealth than anyone in history, with most of that loss occurring in just four weeks. His net worth dropped by an amount nearly equal to the combined fortunes of Jeff Bezos and Mark Zuckerberg. Though Musk remains the world’s richest person, these wild paper swings expose fundamental truths about risk, entrepreneurship, and how we measure value.

The SpaceX IPO shattered records as the largest of all time, raising $75 billion in cash with an initial valuation of $1.77 trillion, eclipsing Saudi Aramco’s $29.4 billion and triple Hynix’s $26.5 billion. At its June 26th peak of $225 per share, Musk’s 42 percent stake pushed his net worth past $1.4 trillion, briefly making him the world’s first paper trillionaire.

But Elon does not have tens of billions of dollars sitting in bank accounts. His wealth comes entirely from his ownership of companies. In fact, Musk was not wealthier after the IPO than he was before it. Nor is he poorer now than he was when his SpaceX shares were “worth” more than a trillion dollars. What has changed is how the public values what he owned: 5 billion shares of SpaceX (roughly 42 percent of the company).

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