00:00You're the richest person on the planet. Why would you take out a mortgage? Elon Musk is the
00:04richest person in the world and is even on track to become a trillionaire, but he's taken out
00:09mortgages before. This is actually a relatively common thing for ultra high net worth individuals
00:14to do. One example is Mark Zuckerberg, who actually refinanced his Palo Alto home,
00:21the 30 year 1% mortgage rate back in 2012. A source I spoke to at Compass explained that
00:27ultra wealthy individuals think about liquidity differently from average Americans. They'd
00:33rather keep their money working for them in other investments, businesses, or even art rather than
00:39just keeping it all tied up in one property. So another benefit for billionaires taking out a
00:45mortgage versus paying it all out front is that mortgage interest can actually be tax deductible
00:51for loans up to $750,000. While that doesn't cover the cost of a multimillion dollar property,
00:59they can also itemize these when they're filing their taxes. So they'll at least get a little bit
01:04of a break. Another reason billionaires will do this is because they can actually borrow against their
01:09home later on if they need to. So if they needed to take out a loan for any reason, they
01:15can borrow
01:16against their home instead of seeking outside investment. And for some billionaires, these pros
01:21outweigh the cons when it comes to buying a home outright.
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