When billionaires like Mark Zuckerberg, Jay-Z and Beyoncé go home shopping, you might assume they'd just wire the money over and call it a day. But even at the top of the wealth ladder, financing real estate is a smart move — and nobody made that clearer than Elon Musk, who once took out five mortgages in a single year.
Back in 2012, Zuckerberg picked up a $5.95 million home in Palo Alto, California. Instead of paying cash, he signed up for a 30-year adjustable-rate mortgage with an eye-poppingly low 1.05% interest rate. For someone worth billions, taking out a loan might sound strange — but at that rate, it was practically free money. It let Zuckerberg keep his cash tied up in investments where it could earn far more than the cost of the loan.
Don't Miss:
- Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – with $1,000 you can invest at just $0.26/share!
- Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum.
Meanwhile, Musk was writing a different kind of real estate playbook. By the end of 2018, Musk had racked up about $61 million in mortgages across five luxury properties, including several Bel Air mansions and a Hillsborough estate. Financing gave Musk the breathing room to invest his billions elsewhere — whether pouring money into Tesla, SpaceX, or new ventures that needed capital fast.
Jay-Z and Beyoncé took the same approach when they bought their Bel Air estate for $88 million in 2017. They didn't swipe a black card. Instead, they financed the deal with a $52.8 million mortgage through Goldman Sachs. With borrowing rates low and their earning power sky-high, tying up that much cash in real estate simply didn't make sense.
Even Warren Buffett — arguably the poster child for financial common sense — has gone on record praising 30-year mortgages. Buffett himself used one when buying his Laguna Beach vacation home in the 1970s, even though he had more than enough to pay in full. The logic was simple: keep your money working. Investments were earning higher returns than the interest rates on loans, making mortgages a way to quietly get richer over time.
Trending: Hasbro, MGM, and Skechers trust this AI marketing firm — invest pre-IPO from $0.60 per share.
If billionaires who could buy entire neighborhoods outright choose to finance their homes, it raises a real question for everyone else: should you?
Even with mortgage rates hovering around 6.5% to 7%, many experts say financing still makes sense — even if you could technically pay cash. Tying up hundreds of thousands, or even millions, in a home locks away money that could be invested elsewhere. A mortgage preserves liquidity, offering flexibility for emergencies, business opportunities, or higher-earning investments. Plus, mortgage interest on loans up to $750,000 remains tax-deductible, offering potential savings.
A strong down payment — at least 20% — can also eliminate private mortgage insurance, slashing monthly costs. And while today's rates feel high compared to a few years ago, they're still well below the double-digit rates seen in past decades. Locking in now still leaves the door open to refinancing later if rates fall.
Owning a home free and clear offers peace of mind and removes a monthly payment. But if billionaires prefer to keep their cash moving, it's worth considering whether your money could be working harder too.
Read Next:
- The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. See which asset class has outpaced the S&P 500 (1995-2024) – and with near-zero correlation.
- Donald Trump Just Announced a $500 Billion AI Infrastructure Deal — Here's How You Can Invest in the Entertainment Market's Next Big Disruptor for Just $998
Image: Shutterstock
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
