Why Jay Z & Beyoncé Paid For A $200M House In Cash

What wealthy individuals are doing to leverage the financial system, save on taxes and much more..

$200 million is an astonishing amount to just about everybody in the world, but if you're Jay-Z and Beyoncé, you can afford to drop it all at once ... and still be one of the richest couples on the planet.

Sources with direct knowledge tell TMZ ... the two paid $200 million CASH for the 30,000-square-foot Malibu mansion purchased from William Bell, one of the biggest art collectors in the world.

The figure is mind-boggling ... but if you look at the couple's financial portfolio, they've certainly got the assets to make it work.

According to Forbes, Jay is worth $2.5 billion ... thanks to his lucrative liquor businesses, Ace of Spades and D'Usse, his music catalog, and his fine art collection -- with pieces from Basquiat.

In 2022, Forbes estimated Beyoncé's net worth to be just shy of $500 million ... crediting her tours, music catalog, and appearances in feature films to the majority of her wealth.

Of course, she also just kicked off her "Renaissance" tour, which is expected to rake in more than $1 billion ... so their net worth will only go up from here.

So for the question of the day:

What wealthy individuals are doing to leverage the financial system, save on taxes and much more?

For those who don’t understand let me explain:

1.) Jay Z and Beyoncé have $200 million dollars worth of assets. This can be stocks, bonds, etc. the assets have to be something the banks are interested in and I’m sure those 2 have strong relationships with their banks. I also wouldn’t be surprised if they put up their music masters as collateral as that’s something that could be very valuable to banks (tho I highly doubt this but it’s something to think about lol)

2.) jay Z and Beyoncé asks the bank for a $200 million dollar cash loan and uses their assists as collateral. So if they don’t pay back the loan then the bank gets to sell off their assets to pay off the loan for them. Jay z and Beyoncé are basically saying “hey if I don’t pay back this $200 mill you can have all these assets to cover the loan” and the banks are like “bet say less”

This is called a margin lending account and it’s a loan against assets on available securities but it’s also up to 50% of the assets so the other 50% are used as collateral. So this means, if the house was paid for was 200 million that means that at the very least the account that paid for the home has minimum 400 million in assets in it.

3.) Jay Z and Beyoncé now have $200 million dollars in cash but keep in mind it’s a loan still. They use the cash to pay for a $200 million dollar house IN FULL! They own 100% equity in the property. Equity is the value of the property vs. how much you owe. If you pay off the full value of the property then you don’t owe anything and that means you have 100% equity.

4.) Jay Z and Beyoncé now refinance the property, or get a mortgage. This is just a fancy way of saying they got a loan AGAIN and used the house they now 100% own as collateral. They did the same thing twice, only difference is the type of assets. When you use a house as collateral they call it a mortgage/refinancing. The only main difference is the terminology. So now they got another $200 million dollars cash

5.) Jay Z and Beyoncé now uses the refinance money, or new loan, to pay off the first loan fully. And now they are making payments towards the new property since they refinanced the house. This new refinance term, or new mortgage, has wayyy better rates and i am willing to bet their interest rate is 1% or even lower if that’s possible. And they can write off the interest payments on their taxes, lowering their taxable income. 

The main reason why they would do this is so that they have cash in hand without selling their assets.

If all your “money” is in investments it might not be a good idea to pull your money out of them to then use them to buy stuff. It would be wiser to get a loan against your investments and use your investments as collateral instead. That way your money KEEPS GROWING in investments and you have cash ready to then buy more investments