Billionaires Beyonce and Jay-Z Buy $88 Million Mansion; Why Not Pay Cash?


Hip-Hop’s wealthiest couple has recently closed on the biggest purchase of their life. The LA Times reported power couple Sean Carter (Jay-Z) and Beyonce Knowles have purchased an $88 million dollar mega mansion from developer Dean Mckillen. The property designed by architect Paul McClean features four pools, a media center, it’s own wellness center, over 30,000 square feet of sprawling space. The property was originally listed for $135 million, however Jay-Z and Beyonce were able to secure the home for significantly less, making it the largest transaction in Los Angeles County this year.

The Carter’s used conventional financing via the pairs's blind trust to acquire their newest compound. A blind trust is a vehicle in which people use to place investments in but have no clue as to what the trustee or person in control of the trust is doing with the funds invested. The hope is that whatever the trustee does in fact do, results in more money for the owner of the trustee on the back end. Jay-Z has been known to politic with some of world's most wealthy & savvy investors like Warren Buffet. His most recent album titled “4:44” details many of Jay-Z financial ideals such as investing and creating generational wealth so it's no shock they snagged such a deal. 

This bolsters their portfolio that already features an 8,300 square foot penthouse in Tribeca in which they paid $6.3 million back in 2004. Their west coast pad carries a mortgage of $52 million. Using an interest rate of 4% this brings their monthly payment to approximately $252,000. To put this in perspective, the median LA home price in July 2017 was $610,000 and the Carters will pay a quarter million per month for their mortgage.

It makes you ask the question; with so much wealth why did they not purchase the home cash?



The reason is because mortgages offer many tax breaks. With a current net worth north of $1 billion the Carters are sure to pay hefty tax bills each year. The taxes in addition to the 4% interest rate will help lower their tax bills since they are schedule A itemized deductions.

Wealthy people focus on slashing tax bills just as much as they focus on earning more and making smart investments as you should too. The best way to do this for the everyday person is through home and business ownership in addition to putting funds into accounts that directly offer tax breaks like IRA’s or employee sponsored 401K’s or 403B’s.

Jay-Z’s recent album release was more than just a music project. It gave listeners a glimpse into the stars life and the way the couple views money. We can take a page or two from Bey and Jay’s notebook to improve our lives financially.