Time Magazine’s Person of the Year for 2021, Elon Musk, is known for many things. As well as his engineering brilliance and foresight when it comes to electric cars, solar energy, tunnels, and space, he’s also a shrewd businessman. Although he often likes to play down his knack for investing and making money, he certainly knows how to turn a profit both in business and in the stock market. Indeed, you only have to read about the $5 billion (£3.7 billion) he made selling Tesla shares in November 2021 to know that he’s far from a novice when it comes to finance.
Elon Musk
Something else that Musk has also become known for in recent years is his support for certain assets. For example, he’s championed the cryptocurrency Dogecoin on Twitter for the last two years. What Musk supports and doesn’t support isn’t important here. What’s interesting is the influence he’s had on those that follow him. It might be a stretch to say that he’s sparked a new wave of interest in investing. However, given his profile, it’s fair to say that he has opened more people’s eyes to the possibilities of buying and selling financial assets.
A Tweet Can Start a Revolution
For example, a tweet he posted on November 6, 2021, referenced the speculation that “unrealised gains” may be taxed in the US. He proposed selling 10% of his Tesla stock to pay his fair share in tax and asked Twitter for advice.
The poll received over 3.5 million votes. We don’t know how many people actually looked into the proposal that unrealised capital gains will be taxed in the US. However, there’s a chance at least some did. Therefore, by simply posing a question on Twitter, Musk has exposed his followers to ideas and concepts, such as capital gains tax, that they may have otherwise not known about. While it's fair to say that US and UK taxation is not quite the same, some products are tax-efficient and help with capital gains.
The upshot of this is that more people are becoming interested in financial matters. When you combine this with the hype that often surrounds Tesla shares and the gains they’ve made in recent years, Musk may well have inspired a new generation of investors. We can step this a step further and say the surge in interest is not only down to Musk and influential people on social media but also technology. A modern investment platform makes it possible for individuals to buy stocks and shares in their ISA account via their iPhone or Android device
Illuminating New Ideas Can Inspire New Behaviours
Indeed, taking into account the fee (as low as £3 per month), would-be investors can open an ISA and buy stocks. This is regarded as a tax-efficient way of investing because it shelters any profits from capital gains tax. Given that tweets such as the one posted by Musk in November 2021 make things like capital gains tax relevant, there’s a nice synergy here. References to capital gains tax by someone like Musk can prompt people to research what it means. Then, with this newfound knowledge, they’re able to understand the benefits of a stocks and shares ISA (i.e. it shelters investments from capital gains tax).
Now, this isn’t to say that people wouldn’t know about capital gains or tax-efficient financial products without reading Musk’s tweet. However, these kinds of social media posts shine a light on certain issues. Indeed, it’s no different from a movie star raising awareness about climate change. They’re using their profile to illuminate ideas and issues that people may not have considered. The same is going on, even if it is indirect, with Musk. His references to money, capital gains, tax, and shares has the effect of starting new conversations.
This filters new ideas into the social media sphere, ideas that can inspire new behaviours. When you combine this with a wave of innovations that make things like investing easier, you can see why we’re in the midst of a financial revolution. All the credit can’t go to Musk, but he’s certainly helping to fuel a wave of change and turn more people into the idea that they can take control of their financial futures.