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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.
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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.
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If billionaires who could buy entire neighborhoods outright choose to finance their homes, it raises a real question for everyone else: should you?
