Welcome to Chapter 5 of 2022. May the month of May herald marvellous moves and achievements for us all. Here’s also wishing all workers, a happy worker’s day in arrears.
As we are aware, Elon Musk has gotten his way and is set to buy the outstanding shares of Twitter. Today, I will be discussing the life and money lessons I have learnt from this process.
- Keep them guessing: Although he says the move to purchase Twitter is about protecting free speech; many people still believe there is or are underlying motives behind this move. Whatever the case, Elon is yet to satisfy people’s curiosity.
His unwillingness to divulge further information is not unusual as many wealthy people tend to be miserly about personal information. From experience, there is actually nothing wrong with this as people cannot interrupt or interfere with what they know nothing about.
As we say in Pidgin English, “e get why” people are circumspect about certain information.
- His money His prerogative: For many people, the money being spent on this purchase could have been better utilised on other laudable activities such as ending world hunger. As valid as their opinion may be, we, unfortunately, cannot legislate how an adult can spend his money.
The discussions remind me of what a tailor once told me about nothing being expensive, only that they are unaffordable to certain people. I still agree with that statement given that people will spend money as they deem fit.
For example, I have a friend who doesn’t believe expensive wigs or weaves are a good investment whilst I tend to believe otherwise. According to her, the capital outlay can be better utilised in other activities. On the other hand, I believe spending on quality wigs ensures longevity which makes it cheaper on the long run.
Clearly, it is a function of our perspective and what we consider important to us. This principle also holds true in the case of Elon Musk & Twitter.
- Debt can be a useful tool: From news reports, this purchase will be funded mainly by debt of about $25.6 billion from several banks and is secured by Elon’s Tesla shares. In addition, there are certain covenants regarding the value of the share price per term.
The important thing to me here is that this transaction typifies how the wealthy leverage existing assets to expand or grow their net worth.
They ensure that they have a business or a source of income that serves as the vehicle that can be leveraged to diversify their portfolio or income streams. This is exactly what is playing out here.
Although only time can tell whether this purchase is a smart decision; one thing I am certain of, is the fact that you cannot afford to bet against a man who made electric vehicles (EVs) a viable option and changed space travel.
Before Tesla, EVs did not have batteries that could cover travel long distances. Space X has been able to develop rockets that can be reused and in the process, now launches rockets to space on behalf of NASA.
Till we meet again next week, do have a profitable week!