Live Life With Less Financial Stress

**Rachel Cruze** (0:30)
We have questions about life and money, so give us a call at 888-825-5225.
All right, starting us off this hour, we have Lynn in Jersey City, New Jersey. Hi, Lynn, welcome to the show.

**SPEAKER_2** (0:46)
Hi, Rachel.

**Rachel Cruze** (0:47)
Hi, how are you doing?

**SPEAKER_2** (0:49)
Good, so you guys are kind of the tiebreaker between me and my husband. Yes. Just to give you some background, we are on baby step, six, five and six, and we have a house that we're aggressively working to pay off, but we have a lot of equity. So we're almost at a cap of hitting about 500 for capital gains taxes.
So my husband doesn't want to pay it off, but I want to pay it off because it gives me peace, and we don't know what to do. He's saying, you know, if we pay it off, we're going to pay taxes on the gain since we are planning to upgrade soon.

**John Delony** (1:27)
How soon?

**SPEAKER_2** (1:28)
I don't know what to do. Maybe like in two years.

**Rachel Cruze** (1:33)
Okay, but there's going to be an element of paying taxes on the equity regardless of whether you pay it off or not.

**SPEAKER_2** (1:39)
So we're under the 500 threshold right now, but if we continue paying it off the way we have intended to, the equity goes, hits that 500 Correct. So it will be above that. Yep, in two years.

**Rachel Cruze** (1:54)
In two years. When are you guys going to move? I know Jones just asked that.

**SPEAKER_2** (1:57)
We're looking around two years. Yeah, our family keeps growing. We owe about $250 on it and it's worth $750, around $750 or $700, yep.

**John Delony** (2:10)
So how quickly could you pay it off?

**SPEAKER_2** (2:14)
When I worked at Excel, it looks about three years and a half, realistically.

**Rachel Cruze** (2:20)
But you're going to hit that mark in two years?

**SPEAKER_2** (2:24)
Correct, or a little bit less, actually, if I continue paying it the way we're doing it now.

**Rachel Cruze** (2:28)
That you're doing it now. Yeah, I mean.

**SPEAKER_2** (2:30)
It's just my husband's like, save the money, we have a 2.5 interest, let's put it into a business idea. I really don't know what to do.

**John Delony** (2:38)
That to me sounds like what the real issue is, is he wants to use that money for something else.

**SPEAKER_2** (2:44)
Yeah, and I feel guilty sometimes not supporting him, but it gives me peace of mind, you know, just paying off my house.

**Rachel Cruze** (2:51)
What's his business idea? What is he wanting to use the money for?

**SPEAKER_2** (2:56)
He has an idea of creating like video games, essentially.

**Rachel Cruze** (3:02)
Okay, has he done any work on this prior? It's still just in the idea phase.

**SPEAKER_2** (3:07)
He has. No, he has. He's doing protocols essentially, and we're waiting to kind of start marketing it, and he wants the money for marketing.

**Rachel Cruze** (3:18)
Okay.

**SPEAKER_2** (3:18)
But you know, I'm a woman, and I love the security of having my house paid off.

**John Delony** (3:23)
I'm a man, and I like the security of having my house paid off. I mean, it's not a gendered thing. I think the real conversation is not about the tax advantages, or we're gonna have to pay tax on. That to me isn't the issue. The issue is, cause here's the thing.
I won't go down that road. I could make you a math case, but this isn't a math question. It's a, you want peace in the middle of your chest, you want peace in your household, and so, and you also have a husband who wants to be a video game designer, and so having to pay it off house lets him go down that rabbit hole risk free, or with less risk, let me say it that way. And he doesn't want to pay the house off, he wants to invest in his video game design. That's the real issue here. Making it about, instead of sending, paying taxes on $250,000, you want to give that $250,000 to the bank, or like you want to shell it around, that's fine. And even if there was a tax advantage, in my house, we call it the sole tax, I'll pay the difference so that no one can take my house from me, right?
So, you can make those kinds of cases all day long, but it sounds like that's a proxy war for what's really going on, and that is your husband wants to take that money and do something else with it.