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The Moneyist: ‘My wife was diagnosed with cancer at the height of the pandemic’: What can we do to avoid financial problems?

Dear Quentin,

I’m 45 years old and I’m married with two kids, ages 3 and 7. My wife was diagnosed with cancer at the height of the pandemic, and stopped working due to the side effects of her treatment. She is currently cancer free, but still recovering from chemotherapy and unable to work. Frankly, it will probably be years before she can rejoin the workforce.

Fortunately, I do fairly well financially. I’m a software engineer and my yearly salary is $150,000, including bonuses. I’m up for a promotion soon, which should increase that by $20,000. Even before my wife got sick, she had expressed interest in leaving the workforce to care for the kids, but her cancer diagnosis forced that decision upon us.

I have $300K in my 401(k), and I owe $255,000 on our home, with 20 years left on the mortgage. I also have $42,000 in an account with an automated investment service.  I’m well aware that my 401(k) is below what it should be, but for the past 3 years I’ve been maxing out contributions. I plan to continue doing that.

“My wife was diagnosed with cancer at the height of the pandemic, and stopped working due to the side effects of her treatment. ”

I also have a three-unit building where my mom lives. She lives rent free and the other two units are rented out. I have very little positive cash flow from that property, and I am currently investing in some remodeling projects. These types of buildings have skyrocketed in value recently, and I consider it a wise idea to invest in it.

My wife and I have always been relatively frugal — our house is nice and in a great neighborhood, but modest. We also bought our cars used. We definitely prefer to live below our means, which ended up being a very wise decision given my wife’s sudden inability to work.

My mom is 80 years old, and in very good health. We’re aware that at some point she’ll have to move in with us, but I don’t have the room in my current home. My mom and my wife get along well, so our idea is to buy a much larger house for all of us, probably within the next couple of years.

“My mom and my wife get along well, so our idea is to buy a much larger house for all of us, probably within the next couple of years.”

Given today’s house prices — and this is just speculation — I calculate I could clear about $500,000 after the sale of my house, my three-unit building, and the house where I grew up in South America, which my mom still owns. That should be enough to cover a sizable down payment for a large enough home for all of us (we live in the Northeast, which is not cheap).

My question is: Should I sell the three-unit building or keep it? If I keep it, take my mom with me, and rent all units, I could have about $1,000 monthly positive cash flow — not a huge amount, but not insignificant either. Also, my mom’s house in South America is rented to a relative, and it generates about $8,000 a year in positive cash flow.

Or should I sell everything and put half of the proceeds in my investment account?  I am very happy with how that account has been performing. I’m getting an average of 12% growth per year. The downside is that it’s not tax deferred like a 401(k), but the benefit is that I can take money from it as needed, and I can contribute as much as I wise.

I would love some guidance, given that I’ve become the sole provider in my family.

Proud Husband of a Cancer Survivor

Dear Proud Husband,

I’m glad your wife is cancer free and you can both afford for her to rest and recover. Never make big financial decisions in the heat of a crisis — especially when it’s an emotional time such as what you are going through now. The good news is that you have money that you can use for an emergency fund, and several sources of extra money should you sell your three-unit building or your mother’s home.

The good news: You are on a solid financial footing. You have a healthy 401(k), far above the average for someone of your age. Last year, the average 401(k) balance for Vanguard participants was $129,157, the company said, and the median balance was $33,472. What’s more, only one-third of U.S. adults even have a 401(k). You earn nearly four times the average annual salary in the U.S.

Figure out how much you would need to buy a home that would accommodate your mother-in-law, and still allow you to live within or below your means. It may require you selling your mother-in-law’s home and renting the apartment where she now lives. Or selling the lot. One important caveat: Diversification is important in any portfolio, and your investments are heavily skewed towards real estate.

Still, you don’t need to go “scorched earth” on your financial decisions. It’s exciting to realize these gains, and make big changes. It’s the equivalent to three cherries on the slot machines, except you have spent years putting in a lot of hard work to earn those cherries. You have exercised caution and restraint with how you have handled your finances, and it doesn’t seem like you should change that approach now.

So what do you do? Do the numbers on (i) selling the lot, and using the proceeds from the sale of the two properties to buy a new house that will accommodate your mother-in-law, (ii) realizing the gains from the two rentals that are currently generating no revenue and (iv) selling one of the rental properties. You can then decide to buy a new home, or add living space to your current home.

Your decision will depend on your comfort level with those three scenarios. I just don’t want you looking back in 10 years and thinking, ‘I should have kept that building. It could have been a nice nest egg, or even helped pay for our kids’ college education.’ It may be the right thing to sell now, given the modest rental profits, but it’s not costing you anything either, and once it’s gone there’s no going back.

You can email The Moneyist with any financial and ethical questions related to coronavirus at, and follow Quentin Fottrell on Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’

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