“Money is freedom.” This popular money script contains considerable truth. Having money can provide a lot of options and flexibility that are not possible without money. However, since all money scripts are partial truths, money doesn’t always bring freedom. It can create physical limitations, restrict relationships, reduce leisure time, and exponentially increase responsibilities.
In the words of one of the wealthiest people in the world, “Possessions kind of weigh you down.” Elon Musk, who can be considered an authority on this topic as his net worth is around $160 billion, said this in a London Times interview on May 16, 2020. He added that possessions are “kind of an attack vector….People say, ‘Hey, billionaire, you’ve got all this stuff.'”
Musk found that his “stuff,” especially his seven homes, was getting in the way of focusing on his dream of creating a commercial space travel company, so he decided last year to liquidate all of his houses. He hinted to the Times that he was selling them partly for spiritual reasons.
Having sold his last home in June 2021, Musk now lives in a $50,000 tiny home near his SpaceX headquarters in Boca Chica, Texas, according to an article in Yahoo.news by Sophie Dweck on July 8, 2021. She reports that the residence he rents from SpaceX is a transportable 400-square-foot unit. It is set up like a studio apartment and features a fully equipped kitchen, bathroom, living room, and bedroom.
If one would describe homelessness as not owning a home, one of the world’s richest men is now homeless. Of course, Musk isn’t exactly in danger of living on the streets. He has the means to live in opulence almost anywhere in the world.
Still, for most people owning a home is seen as part of the American Dream, something many people work hard to obtain. Owning things seems to be in our DNA. The concept of “that’s mine” runs so deep it’s probably hardwired into our brains. To prove it, just try to take a toy away from a two-year-old and listen to the screams of “Mine!”
Owning is often the financially advantageous option. For example, financial experts tell us owning a car is better than leasing. And who would think of not owning the clothes you wear? It’s common, however, to confuse “ownership” with “control.” They are not the same. While ownership does include an aspect of control, control of an asset does not need to include ownership.
Curiously, the control of an asset is often even more valuable than ownership. If you could lease a new $25,000 car for one dollar a month for 10 years, would you really care that you didn’t own it?” Probably not. In fact, you would be much better off financially, with a higher net worth, if you didn’t own it.
Or take a middle-aged tenant with a lifetime lease on a property subject to rent controls who pays rent at a tenth of current market rates. Who has the more value from that asset, the tenant or the owner? The tenant has a valuable leasehold interest that in some cases could be worth more than the ownership interest.
If we can have regular access to something, whether it’s using a family beach house, sharing power tools, or renting a trailer to haul a piano, we don’t need to own it. Often, we’re financially ahead not to own it.
Musk went full circle in his home ownership, from no house to seven and back to none. It’s clearly a choice he has made to reduce the “stuff” that he felt was weighing him down.