Elon Musk Took Out $61 Million in Mortgages. He Didn't Have To.

The world's richest man has a mortgage. Several of them, actually.

The Numbers

Elon Musk took out $61 million in mortgages in 2018 alone — spread across five California properties, according to the Los Angeles Times. His current net worth is $662 billion. Mark Zuckerberg, worth roughly $200 billion, refinanced his Palo Alto home in 2012 with a 30-year adjustable-rate mortgage at 1.05%. Paris Hilton — estimated worth $300-$400 million — took out a $43.75 million mortgage from JPMorgan Chase on a $63 million Beverly Hills mansion she'd already bought. These aren't people who needed financing. They chose it.

Why It Makes Sense

The logic is straightforward: a dollar locked inside a house earns nothing. A dollar invested in the market has historically averaged around 10% annually. If a mortgage costs 5-6% in interest, and the alternative is returns of 10%, the math favors borrowing.

There's also a liquidity argument. Unlike stocks, homes can't be sold in an instant. Tying up $50 million in a property means $50 million that can't be deployed elsewhere on short notice. Mortgages solve that. And for those who itemize taxes, interest on up to $750,000 of mortgage debt is deductible — a smaller but real benefit.

The other factor for billionaires specifically: selling stock to buy a house triggers capital gains taxes. Taking out a loan doesn't.

What It Means for Regular Investors

The principle scales down. As Enness Global CEO Islay Robinson told Fortune, "It's less about the cost of the loan itself and more about optimizing where their money is placed." If your investments are returning more than your mortgage rate, paying off the mortgage early isn't necessarily the smart move — it's just the emotionally satisfying one.

The takeaway isn't to mimic Musk. It's that debt isn't always a problem to eliminate. Sometimes it's a tool.