Inside the impossible math of managing Elon Musk’s trillionaire SpaceX wealth

Both of these feats were challenging for even Musk to wrap his head around, considering he had said he originally expected the company to fail.

“It’s certainly hard to believe that a little company that started in a warehouse in El Segundo is now going for the largest IPO ever,” he said at an appearance at Nasdaq when SPCX started trading on Friday. “And let me tell you, if people had told me this was going to happen, I [would’ve said]: ‘Man you must be smoking some really good crack.’”

SpaceX started trading on Friday at $150 per share, and was up to $171 per share by midday, solidifying his title as the world’s first-ever trillionaire, including his majority stakes in his rocket company and Tesla. 

And while there’s a large leap between millionaire and billionaire status, it’s even harder to wrap one’s head around what it actually means to be a trillionaire. Even experienced wealth managers have a hard time wrapping their heads around how they’d manage a fortune the size of Musk’s, especially since it has the power to move markets and make other massive influences if not kept in check.

“I would guess there are zero wealth advisors qualified to handle $1 trillion,” Jake Falcon, CEO of Falcon Wealth Advisors, told Fortune. “If Elon hired me to manage his wealth, I would build a new type of family office.”

Falcon said that would mean building an office that “truly lined up” with Musk’s philosophy and growing a team that caters to all of his wealth-management needs, while also having the confidence to tell him when he’s making a wrong choice.

A whole new scale

Managing a trillionaire isn’t just like managing a billionaire at a larger scale, T.L. Turnipseed, head of estate and tax planning at Alta Trust Company, told Fortune. 

While a billionaire typically needs sophisticated investment management, tax planning, and a family office, he said, a trillionaire would need “something close to private enterprise governance.”

“The planning has to address control, succession, creditor exposure, market volatility, public scrutiny, liquidity, philanthropy, and multigenerational governance all at once,” he explained. “The real difference is that the central question shifts from ‘can we grow the money’ to ‘can we preserve control and purpose’ while the number becomes too large for ordinary planning.’ The answer is a governance system, not just a portfolio.”

Evan Mills, associate financial advisor at Scholar Advising, which specializes in complex wealth planning for ultra-high-net-worth families, said trillionaire wealth can really move markets.

“A billionaire can have concentration risk in a single company or a single sector. But at a trillion dollars, they not only have concentration risk, they have major market impact for any move that they make,” he said. “They sell a stock, they could control the price of that stock just by selling groups of it. Now they’re worrying about voting control and losing control of their overall company.”

For Musk specifically, Mills added, the scrutiny on every transaction compounds the risk. “We’re talking about Elon Musk, so every single movement that gets made is going to be scrutinized,” he said. “The public perception of any move a trillionaire makes in their business is going to drive, or could drive, fear into retail investors and institutional investors.”

The liquidity trap

A trillion-dollar net worth also doesn’t mean $1 trillion in the bank. “They have a trillion dollars on their balance sheet, but that doesn’t mean they’re extremely liquid. How do you actually get your money?” Mills said. “Are you going to borrow against the stock? Now you’re worried about margin risk, lender risk, concentration risk, interest rate risk.” 

Debt actually becomes one of the most useful tools available at this scale, he said.

How wealth advisors would manage a trillionaire

Falcon said he would keep Musk’s wealth-planning “very simple and direct” at its core, with the rest going toward passion projects and speculative plays.

“It would be difficult to only invest in public markets as trades would literally move the market,” he explained, “so there would need to be a large private component as well.”

But the bigger job, the advisors agreed, is defensive. Turnipseed said extreme wealth “is a litigation target, a governance challenge, and a tax problem before it is an investment problem. And at this scale, small inefficiencies carry staggering costs. 

“At a trillion dollars, a 1% inefficiency is roughly $10 billion,” he said. “That is why the work starts with protection and structure, not with the portfolio.”

The structure he’d build would resemble an institution more than a portfolio, anchored by trusts designed to protect the wealth, freeze its taxable value, and organize who controls it. 

“A trillionaire does not need another product,” Turnipseed said. “He or she needs a resilient architecture, anchored by the right trusts in the right jurisdiction, that protects the wealth, organizes decision-making, reduces avoidable transfer taxes, supports philanthropy, and keeps future beneficiaries from inheriting chaos.”

The risk all three kept circling back to is unique to Musk: The companies underpinning his fortune are inseparable from the man himself. Mills said that’s exactly why succession planning can’t wait. 

“Every second of procrastination at this level could create a succession crisis,” he said. A lot of investors are buying into Tesla and SpaceX because they believe in Musk’s vision, he noted, and there’s no guarantee either company stays as successful once the next generation inherits the stock. 

“One of the biggest risks embedded in both of those companies is the longevity of Elon Musk himself,” he added.