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Zuckerberg’s 1.05% Loan Shows How Wealthy Stay Rich

By 4b03   Follow   Mon, 16 Jul 2012, 7:15am   1,543 views   18 comments
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http://www.sfgate.com/business/bloomberg/article/Zuckerberg-s-1-05-Loan-Shows-How-Wealthy-Stay-3709617.php

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1. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   1   10:43am Mon 16 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   God Bless America.

2. StoutFiles Follow Befriend (1) 24 threads 557 comments

   2   12:45pm Mon 16 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   Pretty awful bank if they can't get more than a 1.05% return investing elsewhere. This shows just how bad a beating the banks are taking right now.

3. hidarez Follow Befriend 1 threads 11 comments Rancho Palos Verdes, CA

   3   9:23pm Mon 16 Jul 2012   Share   Quote   Permalink   Like   Dislike   "Wealthy individuals often choose to finance a home purchase rather than pay cash because of the overall low cost of mortgage debt and the additional access to liquidity, Kricena said. In many cases, they invest excess cash that they would have used to purchase the home into higher-yielding assets, he said." You're kidding right? If you're worth $14 BBBBillion, tying up ~$5 million is like me saying I want to put that Snickers and M&M's on my low rate credit card because I don't want to tie up my quarters. Seriously though - for what real reason would a billionaire finance a $5 million home, regardless of how low the interest rate is?

4. New Renter Follow Befriend (3) 13 threads 2,217 comments San Jose, CA Premium

   4   9:28pm Mon 16 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   hidarez says Seriously though - for what real reason would a billionaire finance a $5 million home, regardless of how low the interest rate is? So he can default and squat for three years?

5. taxee Follow Befriend 88 threads 457 comments El Cerrito, CA Premium

   5   9:40pm Mon 16 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   He bought an option. If he changes his mind he can walk. It not like he's going to ruin his credit if he does.

6. rdm Follow Befriend 4 threads 239 comments

   6   1:03am Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   hidarez says for what real reason would a billionaire finance a $5 million home, regardless of how low the interest rate is? Seems like a waste of time doesn't it. I believe most of his wealth is related to the recent IPO and they cant sell the shares for a certain period of time so maybe he needs cash.. More likely he has some financial guy dicking around with all his money, and he sees a better way to invest 5 million to get more return than 1.05%.

7. StoutFiles Follow Befriend (1) 24 threads 557 comments

   7   5:19am Tue 17 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   rdm says More likely he has some financial guy dicking around with all his money, and he sees a better way to invest 5 million to get more return than 1.05%. Bingo. Considering he should get at least 4% on his money elsewhere, taking a 5 million loan at 1.05% is free money.

8. FunTime Follow Befriend (3) 38 threads 801 comments San Francisco, CA

   8   12:03pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   hidarez says If you're worth $14 BBBBillion, tying up ~$5 million is like me saying I want to put that Snickers and M&M's on my low rate credit card because I don't want to tie up my quarters. Your comment makes sense by percentage. The difference is what you can buy with quarters compared to what you can buy with millions. What's the cost of a loaf of bread and other needs? Worst case, you lose a bunch of other money, but you've got a few million invested that you can live on pretty comfortably.

9. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

   9   1:09pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   Why does he even have a mortgage?

10. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 171 threads 4,208 comments Premium

    10   1:29pm Tue 17 Jul 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   What an asshole. Any fucktard can live in a house. With that kind of money, he should be living in a massive zeppelin the size of Manhattan Island with its own restaurants and concert halls with his, respectively, favorite foods and music playing in them. Every morning a private helicopter carrying him, his secretary and harem could arrive at work while the zeppelin drifts around San Francisco flashing the message, "Larry, Bill, Sergey and Larry, Tom and Dead Steve, just fucking BLOW ME! OK?"

11. BoomAndBustCycle Follow Befriend 28 threads 351 comments

    11   2:22pm Tue 17 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   bubblesitter says Why does he even have a mortgage? Because he's smarter than you and figures it's basically free money at 1% interest rate. (Which for Zuckerberg.. it most definitely is).

12. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

    12   2:25pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   Wait...there are investments that have a better return than 1% after inflation and fees? Where can I find these wonderful investments?

13. michaelsch Follow Befriend 21 threads 581 comments South Pasadena, CA

    13   2:37pm Tue 17 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   hidarez says If you're worth $14 BBBBillion, tying up ~$5 million There are several misunderstanding here. 1. Being "worth" $14B does not mean one may use $14B. $14B is just a hypotetical valuation of his stocks. However, he may be unable to convert them to money. Even would he convert them it would be a highly visible sale of stocks that would drag stocks prices down. Imagine Facebook stocks going down 2-4%. Getting $5M cash out of his stocks may reduce his "worth" by hundreds of millions. 2. His $5M loan is basically free with 1% interest. On the other hand, the bank need no money to issue that loan, since it may consider the mortgage well guaranteed. That means all interest on that mortgage is an absolutely free income for the bank.

14. anon12366 Follow Befriend (2) 61 comments Palo Alto, CA

    14   5:39pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   StoutFiles says Pretty awful bank if they can't get more than a 1.05% return investing elsewhere. This shows just how bad a beating the banks are taking right now. This is the real story here. This, of course, also blows a big hole in the local realtors' claims that "people" "investors" whatever were buying with cash. Why buy with cash if you can get a loan at less than the rate of inflation?

15. FunTime Follow Befriend (3) 38 threads 801 comments San Francisco, CA

    15   6:54pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   anon12366 says Why buy with cash if you can get a loan at less than the rate of inflation? Absolutely!

16. Patrick Follow Befriend (54) 5,188 threads 6,157 comments 46 male Menlo Park, CA

    16   7:10pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   But he's so freakin rich that the money he will save is meaningless by comparison. That's the part I don't get. Is he really that greedy?

17. everything Follow Befriend (2) 3 threads 549 comments Madison, WI

    17   8:33pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   Rich are also paid based on the money supply vs. serfs who are paid based on CPI index. This guy's worth is mostly on paper, home loans, heck even our treasuries are now based on cash flows, not net worth. Rich need any write off they can get..

18. New Renter Follow Befriend (3) 13 threads 2,217 comments San Jose, CA Premium

    18   10:54pm Tue 17 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   Patrick says But he's so freakin rich that the money he will save is meaningless by comparison. That's the part I don't get. Is he really that greedy? Probably