Is it a good strategy to +cash out refi every six months?
"When you refinance, there is cost (guess: around $2000-$3000) to cover lawyers, paperwork, surveys, deed insurance, etc. etc. etc. Someone has to pay that cost, and in the end it will be you. Even if you get a ""no points no cost"" loan, the cost is going to be hidden in the interest rate. That's the way transactions with knowledgeable companies works: they do business because they benefit (profit) from it. The expectation is that what they need is different from what you need, so that each of you benefits. But, when it's a primarily cash transaction, you can't both end up with more money. So, unless value will be created somewhere else from the process (and don't include the +cash, because that ends up tacked onto the principle), this seems like paying for financial entertainment, and there are better ways to do that."
In a perfect world scenario you would get a car 2-5 years old that has very little mileage.  One of the long standing archaic rules of the car world is that age trumps mileage.  This was a good rule when any idiot could roll back an odometer. Chances are now that if you rolled your odometer back the car was serviced somewhere, had inspection or whatever and it is on a report.  If seller was found to do this they could face jail time and obviously now their car is almost worthless. Why do I mention this?  Because you can take a look at 2011 cars.  Those with 20K miles go for just a little more than those with 100K miles.   As an owner you will start incurring heavy maintenance costs around 100K on most newer cars. By buying cars with lower mileage, keeping them for a year or two, and reselling them before they get up in miles, you can stay in that magic area where you can drive a pretty good car for $200-300 a month.  Note that this takes work on both the buying and selling side and you often need cash to get these cars (dealers are good about siphoning really good used cars to employees/friends).   This is a great strategy for keeping costs down and car value up but obviously a lot of people try to do this and it takes work and you have to be willing to settle sometimes on a car that is fine, but not exactly what you want. As for leasing this really gets into three main components: If you are going to do EVERYTHING at a dealership and you want something new or newish you might as well lease.  At least then you can shop around for apples to apples.  The problem with buying a new/used car from the dealers in perpetuity isn't the buying process.  It is the fact that they will screw you on the trade-in.  A car that books for 20K may trade-in for 17K.  Even if the dealer says they are giving you 20K, then they make you pay list price for the car.   I have many many times negotiated a price of a car and then wife brought in our car separately and I can count on ZERO fingers how many times that the dealership honored both sides of the negotiations.  Not only did they not honor them but most refused to talk with us after they found out.   With a lease you don't have to worry about losing this money in the negotiations.  You might pay a little extra (or not since you can shop around) but after the lease you wash your hands of the car.   The one caveat to this is the high-end market.  When you are talking your Acura, Mercedes, Lexus... It is probably better to buy and trade in every couple years.  You lose too much equity by leasing, where it won't cover the trade-in gap and cost of your money being elsewhere.  I have a friend that does this and gets a slightly better car every 2-3 years with same monthly payment.   Another factor to consider is the price of a car.  If your car will be worth over $15K at time of sale you are going to have a hard time selling it by owner.  When amounts get this high people often need financing.  Yes they can get personal financing but most people are too lazy to do this.  So the number of used car buyers on let's say craigslist are way way fewer as you start getting over $10-12K and I have found $15K to be kind of that magic amount.   The pro-buy-used side is easy.  Aim for those cars around $12-18K that are out there (and many still under warranty).  These owners will have issues finding cash buyers.  They will drop prices somewhere between book price and dealer trade-in.  In lucky cases where they need cash maybe below dealer trade-in.  And remember these sellers aren't dealing with 100s let alone 10 buyers.  You drive the car for 3-4 years.  Maybe it is $7-10K.  But now you will get much much closer to book price because there will be far more buyers in this range. How much money do you have in your money market fund and what in your mind is the purpose of this money? If it is your six-months-of-living-expenses emergency fund, then you  might want to consider bank CDs in addition to bond funds as an alternative to  your money-market fund investment. Most (though not necessarily all, so be sure to check) bank CDs can be cashed in at any time with a penalty of three months of interest, and so unless you anticipate being laid off very soon, you might get a slightly better rate of interest, FDIC insurance (which mutual funds do not have), and with any luck you may never have to break a CD and lose the interest. Building a ladder of CDs with one maturing each month might be another way to reduce the risk of loss.  On the other hand, bond mutual funds are a risky bet now because your investment will lose value if interest rate go up, and as JohnFx points out, interest rates have nowhere to go but up.  Finally, the amount of the investment is something that you might want to consider before making changes. If you have $50K put away as your six-month fund, you are talking of $500 versus $350 per annum in changing to a riskier investment with a 1% yield from a safer investment with a 0.7% yield. Whether bragging rights at neighborhood parties are worth the trouble is something for you to decide. "How often should one use dollar-cost averaging? Trivially, a dollar cost averaging (DCA) strategy must be  used at least twice! More seriously, DCA is a discipline that people (typically investors with relatively small amounts of money to invest each month or each quarter)  use to avoid succumbing to the temptation to ""time the market"".  As mhoran_psprep points out, it is well-suited to 401k plans and the like (e.g. 403b plans for educational and non-profit institutions, 457 plans for State employees, etc), and indeed is actually  the default option in such plans, since a fixed amount of money gets invested each week, or every  two weeks, or every month depending on the payroll schedule. Many plans offer just a few mutual funds in which to invest, though far too many people, having little knowledge or understanding of  investments, simply opt for the money-market fund or guaranteed annuity fund in their 4xx plans.  In any case, all your money goes to work immediately since all mutual funds let you invest in thousandths of a share. Some 401k/403b/457 plans allow investments in stocks through a brokerage, but I think that using DCA to  buy individual stocks in a retirement plan is not a good  idea at all. The reasons for this are that not only must shares must be bought in whole numbers (integers) but it is generally cheaper to buy stocks in round lots  of 100 (or multiples of 100) shares rather than in odd lots of, say, 37 shares. So buying stocks weekly, or biweekly or monthly in a 401k plan means paying more or having the money sit idle until enough is accumulated to buy 100 shares of a stock at which point the brokerage executes the order to buy the stock; and this is really not DCA at all.  Worse yet, if you let the money accumulate but you are the one calling the shots ""Buy 100 shares of APPL today"" instead of letting the brokerage execute the order when there is enough money, you are likely to  be timing the market instead of doing DCA. So, are brokerages useless in retirement fund accounts?  No, they can be useful but they are not suitable for DCA strategies involving buying stocks. Stick to mutual funds for DCA. Do people use it across the board on all stock investments? As indicated above, using DCA to buy individual stocks is not the best idea, regardless of whether it is done inside a retirement plan or outside. DCA outside a retirement plan works best if you not trust yourself to stick with the strategy (""Ooops, I forgot to mail the check yesterday; oh, well, I will do it next week"") but rather, arrange for your mutual fund company to take the money out of your checking account each week/month/quarter etc, and invest it in whatever fund(s) you have chosen. Most companies have such programs under names such as Automatic Investment Program (AIP) etc. Why not have your bank send the money to the mutual fund company instead? Well, that works too, but my bank charges me for sending the money whereas my mutual fund company does AIP for free. But YMMV. Dollar-cost averaging generally means investing  a fixed amount of money on a periodic basis. An alternative strategy, if one has decided that owning 1200 shares of FlyByKnight Co is a good investment to have, is to buy round lots of 100 shares of FBKCO each month. The amount of money invested each month varies, but at the end of the year, the average cost of the 1200 shares is the average of the prices on the 12 days on which the investments were made. Of course, by the end of the year, you might not think FBKCO is worth holding any more. This technique worked best in the  ""good old days"" when blue-chip stocks  paid what was for all practical purposes a guaranteed dividend each year, and people bought these stocks with the intention of passing them on to their widows and children." "I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate?  Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble?  The ""pay early"" question seems to hit an emotional nerve with most people. While I start with the above and then segue to ""would you be happy with a long term 5% return?"" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than ""paid in full"" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily.  If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point.  Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free." If you decide you need the extra money, you can always go refinance and get more cash out.  At the end of the day, though, if you pay off your house sooner you can invest more of your income sooner; that's just a matter of discipline. It is great that you came up with a plan to own a rental home, free and clear, and also move up in home.  It is also really good of you to recognize that curtailing spending has a profound effect on your net worth, many people fail to acknowledge that factoid and prefer to instead blame things outside their control.  Good work there.  Here are some items of your plan that I have comments on. 11mo by aggressively curtailing elective spending How does your spouse feel about this?  They have to be on board, but it is such a short time frame this is very doable. cashing out all corporate stock, This will probably trigger capital gains.  You have to be prepared to pay the tax man, but this is a good source of cash for your plan.  You also have to have an additional amount that will likely be due next April 15th. redirecting all contributions to my current non-matched R401(k) This is fine as well because of the short time frame. withdrawing the principal from a Roth IRA This I kind of hate.  We are so limited in money that we can put into tax favored plans, that taking money out bothers me.  Also it is that much more difficult to save in a ROTH because of the sting of taxes.  I would not do this, but would favor instead to take a few extra months to make your plan happen. buy home #2 How are you going to have a down payment for home #2?  Is your intention to pay off home and save a while, then purchase home #2?  I would do anything to avoid PMI.   Besides I would take some time to live in a paid for house. Overall I would grade your plan a B.  If take a bit longer, and remove the withdrawing from the ROTH, it then becomes an A-.  With a good explanation of how you come up with the down payment for house 2, you could easily move to an A+. I agree with the others that pulling the money out of your 401(k) is not the best idea due to the taxes and penalties.  But I also think that a 401(k) loan is not a good option either.  Somehow life happens, and the time when you can least afford to repay the loan (just after losing your job) will be the time when you have to repay the loan or pay the taxes and penalties.  There's just too much risk there.  You also lose the compounding gains you'd get from the investment, and it's likely not worth sacrificing your future retirement for this. It's probably worth finding out how close you are to having your house appraise out for a successful re-fi.  Without that information, you're just guessing.  Depending on how close you are, you pile up as much cash as you can over the next few months to try to pay down the mortgage enough to qualify for the re-fi.  As you're doing this, if home values start coming up in your area, you'll have that going for you as well.  It might even be worth suspending your 401(k) contributions for a short while to give you more cash to put towards the re-fi goal. Debt creates risk.  The more debt you take on, the higher your risk.  What happens if you lose your job, miss a payment, or forget to write the final payment check for the exact amount needed, and are left with a balance of $1 (meaning the back-dated interest would be applied)?  There is too much risk for little reward?  If you paid monthly at 0% and put your money in your savings account like you mentioned, how much interest would you really accrue?  Probably not much, since savings account rates suck right now. If you can pay cash for it now, do it.  So pay cash now and own it outright.  Why prolong it?  Is there something looming in the future that you think will require your money?  If so, I would put off the purchase. No one can predict the future.  Why not pay cash for it now, and pay yourself what would have been the monthly payment?  In three years, you have your money back.  And there is no risk at all. Also, when making large purchases with cash, you can sometimes get better discounts if you ask.