‘Broke billionaires’ or investing geniuses? Why Beyoncé and Jay-Z took out a second $57M mortgage

Core Viewpoint - Jay-Z and Beyoncé are utilizing a financial strategy known as "buy, borrow, die," which involves acquiring appreciating assets and borrowing against them to create tax-free cash flow while potentially minimizing capital gains taxes for their heirs [1][7]. Group 1: Financial Strategy - The couple has secured attractive interest rates on their mortgages, with a new mortgage from Morgan Stanley at a fixed rate of 5% for 30 years, which is favorable compared to the average 30-year fixed mortgage rate of 6.1% projected for 2026 [2][3]. - They have taken on significant liabilities, such as a $110.6 million mortgage, which represents only 2.8% of their combined wealth estimated at around $4 billion [3][4]. Group 2: Real Estate Portfolio - Their real estate portfolio is valued at approximately $313 million, including properties like a Hamptons home, a Malibu mansion, and a New York penthouse, with the Bel-Air mansion being a key asset [5][4]. - The couple has previously secured a $52.8 million mortgage on the same property four years prior to the recent $57.8 million mortgage [4]. Group 3: Investment Opportunities - By borrowing against their mansion, they can invest the $110.6 million owed into business ventures or the S&P 500, which has delivered an annualized return of about 16.3% over the past decade [7]. - This strategy is not exclusive to billionaires; other celebrities, like Paris Hilton, also leverage mortgages for financial benefits, indicating a broader trend among wealthy individuals [8].