I’m a Financial Expert: 2 Reasons I Regret Not Investing in Tesla

Elon Must co-founded Tesla back in 2003 with the goal of “accelerat[ing] the world’s transition to sustainable energy.” It wasn’t until 2008 that the first Tesla vehicle, the Roadster sports car, came out.

Since then, the company has risen rapidly in the industry with its innovative electric vehicles, energy storage products and much more. Today, Tesla is one of the most renowned vertically-integrated sustainable energy companies in the world.

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When Tesla was still in its earliest days, many individuals jumped on the chance to invest. Other people, however, were a bit more hesitant about the idea of putting their money in such a new venture, seeing it as a high-risk opportunity that wasn’t quite worth it.

GOBankingRates spoke with one such individual, Ben Klesinger from Reliant Insurance Group, to find out why he didn’t invest in Tesla — and why he regrets that now .

Money mistakes the super wealthy never make - that you might be doing now.

The Company Was Too New — But the Risk Was Worth the Reward

When it comes to investing, there’s no surefire way to predict what might happen going forward. In those early days, an emerging company like Tesla could have gone either way. For Klesinger, it was just too high of a risk, one he regrets not taking now.

“As an insurance executive, I try to make prudent financial decisions in all areas of my life,” he said. “When Tesla’s IPO launched in 2010, I decided not to invest given the risks of a new automaker and instead put my money in established companies.”

When Tesla went public, its initial public offering (IPO) was just $17 a share. By the end of that first day, however, it’d jumped up to $23.89. That’s a 40.5% gain in a single day.

Had someone invested just $10,000 in Tesla back then, they’d be a millionaire in 2024. That’s because Tesla’s seen a compound annual growth rate of 41.9% since inception. In comparison, the S&P 500 has seen a 12.4% annual growth rate.

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The Potential for Major Returns Was Lost

For Klesinger, not investing when he had the chance serves as a point of regret today due to the lost returns.

“In hindsight, I deeply regret that choice,” he said. “Tesla’s vision for an all-electric future and push for autonomous vehicles were game-changing. The stock price has climbed over 36,000% since the IPO, turning many small investments into fortunes.”

To put it into context, had he invested just $10,000 back in 2010, he’d have been able to purchase approximately 588 company shares (before accounting for subsequent stock splits). But Tesla has done two major stock splits:

• 2020: 5-for-1 stock split
• 2022: 3-for-1 stock split

So, for those who held onto their investment for the long-term, that initial $10,000 would now net them around 8,820 shares. Taking the current trading price of $230 (as of September 13), that $10,000 would now be worth $2,028,600.

Of course, as with any company, Tesla’s share prices have fluctuated over time. Prices have dipped at certain points, such as in December 2022 and again in early 2024, but they’ve seen an overall positive trajectory.

However, at over $200 a share currently, a $10,000 investment today wouldn’t go nearly as far as it did less than 15 years ago. In fact, it’d only get someone about 50 shares of the company.

Lesson for the Future: Take a Chance on Innovation

Hindsight is 20/20 — and there’s no going back to make a different decision — but there’s always a lesson to be learned from the past.

“The lesson I learned is not to be overly risk-averse when evaluating innovative companies with world-changing potential,” said Klesinger. “While investing in startups is perilous, the rewards of getting in on the ground floor of the next technological revolution far outweigh the risks. I missed an opportunity to be part of something truly transformative. My advice to others is don’t miss out on the next Tesla. Take a chance on companies shaping the future.”

It doesn’t hurt to be a little cautious, though. After all, there are no guarantees that the next startup will also be the next Tesla. Not every company will be a winner, or the venture that turns someone into a millionaire. Many stocks underperform. Plus, investing in stocks is a long game — someone who sold too early wouldn’t have reaped nearly the same benefits as someone who’s still holding on today.

If you’re looking for the next best investment, do your due diligence. If it’s a newer company, invest if it’s something you truly believe in — or at least if the vision holds true to your own values. And if they’ve been in the game for a long time, look into their financials to see how they’ve performed over time and where they appear to be going.

Stock picking isn’t a sure thing, though. In fact, it is reported that over 90% of stock pickers underperform. If you’re lucky, you could accumulate a minor fortune. If you’re not, you could end up with much less than you expected. In any case, it might be wise to consult a professional for guidance.

This article originally appeared on GOBankingRates.com : I’m a Financial Expert: 2 Reasons I Regret Not Investing in Tesla