Ely was born in
Williamsburg, Iowa and raised in
Davenport, Iowa. Having completed the eighth grade, he graduated from Davenport Grammar School 4 in January 1901.
 Although some sources indicate that he attended and graduated from
Iowa State University in 1904 (when he would have been 17), the registrar of ISU reports that there is no record of him having done so (nor did he attend the University of Iowa or the University of Northern Iowa).
 Ely likewise does not appear in the graduations lists for Davenport High School.
 By 1904 he was employed as a chauffeur to the Rev. Fr. Smyth, a Catholic priest in
Cosgrove, Iowa, who shared Ely's love of fast driving; in Father Smyth's car (a red Franklin), Ely set the speed record between Iowa City and Davenport.
Ely was living in San Francisco at the time of the earthquake and fire
 and was active there in the early days of the sales and
racing of automobiles.
 He married Mabel Hall on August 7, 1907; he was 21 and she was 17, which meant the marriage required her mother's consent;
 they honeymooned in Colorado.
 The Elys relocated to
Nevada City, California in 1909, and for a time he drove an "auto stage" delivery route.
The couple moved to
Portland, Oregon in early 1910, where he got a job as an auto salesman, working for
E. Henry Wemme.
Soon after, Wemme purchased one of
Glenn Curtiss' first four-cylinder
biplanes and acquired the
franchise for the
Pacific Northwest. Wemme was unable to fly the
Curtiss biplane, but Ely, believing that flying was as easy as driving a car, offered to fly it. He ended up crashing it instead, and feeling responsible, bought the wreck from Wemme.
 Within a few months he had repaired the aircraft and learned to fly.
 He flew it in the Portland area, then headed to
Minneapolis, Minnesota in June 1910 to participate in an exhibition, where he met Curtiss and started working for him.
 After an unsuccessful attempt in
Sioux City, Iowa,
 Ely's first reported exhibition on behalf of Curtiss was in
Winnipeg in July 1910.
 Ely received
Aero Club of America pilot's license #17 on October 5, 1910.