It's Saturday afternoon, the hustle & bustle at the shopping centre is interrupted by the line-up in front of the lottery kiosk. Anxious dreamers place money on their favourite game, expecting to scoff at the world tomorrow. Some say it's worth the buck for the dream, others say you can't win if you don't buy. And that's the basis for our episode today. You can win if you buy into the right lottery....your own mortgage. Let me elaborate on a win/win situation that is available to all those who have a mortgage.

Stanley buys $20 a week worth of 6/49 tickets. He has often won the three number prize ($10), and a couple of times the four number prize ($80) in his last ten years of play. He says that one day he'll win the big one, and until then, he re-invest all his winnings into more tickets.

He also bought that house of his ten years ago for $110,000 and mortgaged $100,000 over 25 years (like everybody else). His payments at 9% are $850 per month. After 10 years, he still owes almost $96,000. He keeps spending his $20 a week on tickets. Had he read this article 10 years ago, he might have decided to increase his mortgage payments by that same $20 per week. Why you ask?

$20 a week relates to $87 per month ($20 X 52 weeks / 12 months = $86.67 per month). That increase in payment would have decreased his overall amortization from 25 years to 18.5 years. In turn now that this is ten years later, he would only owe $67000. That little $20 per week would have saves Stan almost $30,000 (that's his present $96,000 less what it would have been...$67,000). Stan would only have some 8 years to go on his mortgage instead 15

years. His overall mortgage will end up costing him $255,000 (if interest rate stay at his present 9%), while, had he increased his payments originally, that total would be reduced to $208,000,.... $47,000 less. I think that had Stan been given the opportunity to decide whether to buy lottery tickets or invest in a sure thing, $20 a week to deliver $47,000 over all is one heck of an investment.

That is but one example. There are others...had Stan also quit smoking 10 years ago, his $14 a week habit, along with his lottery derivative, would have further reduced the balance to $55,500 and his mortgage would be paid off in another 6 years. Had he prepaid a lump sum of $1000 per year against the principal, he would have his mortgage down to $45,000. Another way of looking at the whole scene, his lottery habit has cost him another 15 years of toiling to pay off the mortgage.

I'm not trying to bankrupt the Ontario Lottery Corporation, but the old saying "a bird in hand is worth two in the bush" certainly applies in this situation. Getting rid of your primary mortgage should be lottery enough. Once your mortgage disappears, then you have additional cashflow to buy all the tickets you want. Good luck.