Humphrey Bogart had a theory that one should live beneath his means. He called this having his “FY” money, meaning that he could say eff you to Hollywood if they demanded that he take a role in a picture that he didn’t want to take. It’s a sound theory, if you think about it. It’s also one that the Trump family seems to have never heard of. The Daily Mail is running a piece on Jared, Ivanka, and her siblings and all the money they spent moving to Florida.
Seems like everybody in the family just loves to borrow money. Why, I, a simple peasant, ask? Aren’t they all worth mega bucks? Especially Ivanka? Doesn’t her husband have $2 billion that he got from the Saudis? Dunno. But they bought a $24 million house and borrowed $15 million. Umm….why not just buy a $9 million house if you’ve got nine million? Why borrow almost twice that amount of money?
- Don Jr, Eric, and Ivanka Trump have taken out a combined $22M in mortgages on their new swanky homes in Florida since relocating from New York over the last two years
- DailyMail.com can reveal Ivanka and Jared Kushner lead the siblings with the highest mortgage, borrowing $15M against their $24M Indian Creek Island home which was finally completed last month
- In Jupiter, about 85mi north on Florida’s east coast, Don Jr, 45, and fiancée Kimberly Guilfoyle, 54, snapped up a $9.7M pad with a $4.8M home loan, while Eric, 39, and wife Lara borrowed $2.4M on their $3.2M house
You see the pattern here, they’ve all got to borrow a lot of bread in order to have a swankier house, when they could just pay cash and live in a perfectly fine house. Now, I know nothing of Florida real estate but I do know something about California and I can tell you that depending on where Eric and Lara bought, $800 (which is what they had before they borrowed $2.4M) would buy them a frame house built in the 60’s. Believe me, they would not want to own what they actually could afford in California.
$3.2M is a different ballpark. That would buy them three to four thousand square feet and nice amenities in a regulated neighborhood with an HOA. The quality of the neighborhood would vary depending on Southern California as opposed to Bay Area. But in all truth, what two, three million bucks buys in California as opposed to Nevada, for example, is mindboggling.
$9M starts to get pretty ritzy, lots of things in Beverly Hills, some nice pads in Bel Aire, and $15M is really getting there. Jared and Ivanka could live next door in Bel Aire to Steve Mnuchin and his “actress” wife, Louise Linton. I don’t know why Louise isn’t producing any more movies after her last one bombed. Maybe Steve said “enough” ya spose? Anyhow, back to the Trumps.
And just like their famous father, Don Jr, 45, Eric, 39, and Ivanka Trump, 42, have followed suit in taking out massive loans to invest in their own swanky mansions and property.
DailyMail.com can reveal the three oldest Trump siblings took out massive mortgages, all at virtually the same time two years ago, totaling over $22million.
And now, DailyMail.com can reveal that Ivanka and husband Jared Kushner took out the highest mortgage out of all the Trump kids for their new Florida digs.
The couple borrowed $15million for the $24million property they purchased in April 2021 on Miami Beach’s exclusive Indian Creek Island, known as ‘Billionaire Bunker’.
The home loan was obtained from Bank of America through an LLC linked to Kushner’s general counsel, Christopher Smith.
The deal is for 15 years and at the time would have been secured at a 3 per cent going interest rate, working out to a payment of around $111,000 a month.
Trump and Kushner, both 42, took more than two years and spared no expense when they gutted and redesigned their new residence, which boasts six bedrooms and eight-and-a-half bathrooms.
The extensive renovation project on the 1.3-acre estate was finally completed last month, just in time for Ivanka to celebrate her 42nd birthday with a dinner party at the palatial property.
Why pay any kind of a mortgage if you can own a place in fee simple and just be done with it? I’ll tell you my best speculation. They all want to look much wealthier than they are. They want to put on the dog. Especially the Kushners, oddly enough. And why did they only have $9M and need to borrow $15M to buy a $24M house? You’d think a guy worth a couple of billion is able to come up with a lousy $24M if he wants to buy a house, right?
I have had some wealthy friends in my life, business owners and such. They all said the same thing. When you’re doing well, bank it. Bank on the lean times, because they will come. And they all said, whenever possible, pay cash. If you can pay cash for a car, or a house, piece of furniture, do it. “Paying interest is death,” they said to me. “It’s like taking money out of your wallet and setting fire to it.”
It’s a lot saner to buy a $50,000 car and pay cash than to put the $50,000 as a down payment on a $200,000 car and pay the interest, not to mention the high insurance. But if you need to put on the dog, then that’s something else. And that’s what I think is going on here. These are Mercedes-level people (and I mean C-Class) who want to be Bentley and Lamborghini-level people. Or at least have you believe that’s who they are.
Something doesn’t add up here. I remember when Trump first began running in 2015 and he was described as a “clown living on credit.” I am now starting to wonder if they all are.
This is a big house of cards. It might just come tumbling down.
Even wealthy people often take out mortgages for a few reasons:
1. Leverage: Borrowing money at a low interest rate allows them to invest their cash in other opportunities that may yield a higher return.
2. Tax Benefits: In many places, mortgage interest is tax-deductible, which can be a significant benefit.
3. Cash Flow Management: It helps in maintaining liquidity and cash reserves for other investments or unexpected expenses.
4. Asset Protection: In some jurisdictions, homes with mortgages have certain protections against creditors.
5. Inflation Hedge: As inflation rises, the real value of the mortgage payments decreases, making it more economical over time.
So, it’s often a strategic financial decision rather than a necessity.
To avoid taxes the super rich avoid receiving any “income” including capital gains. So to buy a $1,000,000 home they would have to pay approximately $200000 in tax on the sale of any stocks to pay cash for the house. If they take out a loan at an historically low 3%, they save $200,000 and reap all the other benefits Matt states. The author of this article thinks like a poor person.
Yep. The purchase of the jarvanka home went through an LLC which makes me wonder what, if anything, are they saying is “income”-another way of avoiding “income” and the accompanying taxes (especially the payroll taxes). One thing their daddy has said, which I am sure he is merely repeating, is never spend your own money if you don’t have to. It is one reason the wealthy are wealthy.
Unless you live in a dying town like the one I grew up in, or in portion of a metro area that’s proverbiallly on the edge of getting seedy then real estate increases in value over time. Sometimes in only a few years one can find a house being worth substantially more than they paid for it. So there’s that, and when combined with some of the tax benefits many mortgages can create it makes sense to borrow. At least to a degree. Now, I haven’t been a homeowner since late 2003 but for me and any other middle class person the tax write off from mortgage interest made owning better than renting. I do recall how GOPers decided to f**k blue states with SALT (state and local taxes) a few years back. It limits the amount of interest that can be claimed as I recall, and when it came to second and/or vacation homes I’m not sure how all that played out. Lots of very rich people who are mostly Republican have quite a few houses/homes so I imagine they found a way to carve out a method to still benefit from interest deductions while most folks who can only afford one home/mortgage got f**ked.
So I assume there is a tax benefit that wannabe princess Ivanka and her brothers are getting.
The Author obviously does not understand how finance works and will likely die poor. Her source is a drunk dead Hollywood has-been.
I can assure you she’s plenty smart and on a lot of topics. Economics and high finance might not be in her wheelhouse like it is in yours but I imagine she had thoughts like my own relating to the changes GOPers put through with SALT in their tax cut under Trump. The idea was to fuck blue state people of upper middle class and higher financial means and I’ve wondered about whether that would impact rich people’s huge mortgages. Some of us have actual true areas of expertise but just because any of us knows a lot about a certain topic(s) doesn’t mean we are experts on everything. That’s someething a LOT of very smart people who are true experts on something too often forget. However, having expertise on one or more matters but not on another like high finance doesn’t make someone stupid. And I’d remind you an awful lot of Wall Street types who are filthy rich often don’t know jack about things they invest in beyond whether or not it looks like a good bet financially. Hell, they often don’t know much about actual financial stuff! Remember the tech bubble? Or the S&L crisis and a couple decades later the repeat with the financial meltdown on Wall St. over mortgages that created a worldwide recession? It turned out a LOT of people in boardrooms didn’t understand all those financial instruments that were being created and traded – only that they were making a shitload of money.
So may I respectfully suggest that if you have some expertise that you continue sharing it instead of insulting those who don’t know this particular topic? Because most people actually don’t know much about about economics. I’ll freely admit my own understanding is less than what it should be in the country and world we now live in and correct me if I’m wrong but most people are more like me in this regard. As has always been the case.
I hope nobody is trying to insult anybody else. No need really. Point is, there are reasons not to just pay cash on a lot of things but especially real estate. I find it funnier than sh*t that temu’s ad pitch is “spend money like a billionaire” when billionaires try not to spend their own money whenever possible. Of course they also don’t by cheap-ass plastic crap from places like temu.
So Boogie is a dead has-been? Who do you like better, him.or Tim Allen? Bogies films are classics. Tim Allen’s best movies are The Santa,Claus films. Compare those to Casablanca and Key Largo or The Treasure of Sierra Madre or the African Queen. I guess you like second rate comedians better than accomplished actors considered among the treats of the 20th c.
Bogart was actually talking about Hollywood actors. There, you’re only as good as the profits of your last picture. Most actors are hot for several years, then one bad choice of script can make you unbankable and the roles dry up. Travolta is a good example. He did well, then had a major lull Stayin’ Alive. rebounded with Pulp.Fiction,then had another lull. Battlefield Earth nearly was a death warrant,,and he has worked, but other than Hairspray, none were blockbudters.–Paradise City was direct to .video last year.
Bogart was correct when it applies to Hollywood, but not for everyone else. Most of us live paycheck to paycheck because,we don’t have a choice if we want a roof over our head and food on the table and a reliable vehicle. We spend around $33 on streaming, plus more for internet and phones.
What we Scots call fur coat and no knickers
I knew a very successful financial advisor who said he would never pay off a home as long as he could get a good deal on a mortgage. he would keep refinancing and invest the money and make more than he was paying on the loan.
and we Texans call “all hat and no cattle”.
Well,,I banks had 3 hellspawn and they each have a bedroom. Are the other two for the live-in nanny and housekeeper? Or is their a,separate pool.house for them?.Because you know I bank can’t possibly cook and clean or take care of kids on her own, like the rest of us somehow manage to do? I am surprised they didn! go for 8bedrooms and separate offices. That house seems kinda small to.me, unless servants,’ quarters and offices and a playroom are not included in the 6 bedrooms.
The leverage argument makes sense to me. If they can get a mortgage at 3% and invest their cash elsewhere to get 7%, it makes sense. If you are in the moneyed class and have some investment sense and good lawyers, you will have access to private hedge funds and placements that most people don’t have knowledge of or access to. If you have lots of inherited money and no investment sense you are donald trump and the results speak for themselves.