Canadian Mortgage Rates – Various Banks – August 2009

3 years ago, I got around 5.13% for 5 years.  I guess I should have analysed the market a bit better at the time, but when buying something as big as a house, you tend to play the caution card.  I liked 5.13 because it felt stable and low enough to survive whatever kind of upswing may have been coming.

Canada Mortgage Rates – August 2009

Considering 5.13% of the first five years of a $300,000 over 25 year mortgage and 5% down (real mortgage amount for $285,000 ) , the amount of interest paid in the first 3 years would have been $42,533.  The amount of principal would have been $18,223. Ouch.

Save Money, Do Your Own Plumbing!

This article isn’t exactly about numbers, but it can be.

The background story is that the 1-1/2″ ABS drain tubing from my kitchen was sheared off in the drain pipe in my basement.

Many things were tried by the previous owner including crazy glue, abs cement, bondo!!! but nothing stopped the leak of weird kitchen drain liquid. Unfortunately, there was absolutely no way to fix this except to replace the entire Y-joint.

This weekend I got tired of looking at the neverending dripping creek in my basement, so I decided to rent a jackhammer, and fix that drain!

Unfortunately, the repair job wasn’t easy because the Y-joint piece (called an ABS Sanitary Tee apparently) had to be replaced in it’s entirety, which was buried 2 inches into the concrete, plus I had to get down a little further to get a clean piece of pipe to join to.

Based on plumber estimates, the total for a professional plumber would be about $400.00 CDN.

I spent

• $54.00 on the 4 hour rental of the small jackhammer from Home Depot
• $28.00 on a construction grade shovel (spade)
• $29.00 on ABS fittings : Sanitary Tee, 1-1/2″ Tubing, 1-1/2″ Coupler and Elbow, ABS Cleanout Fitting
• $4.00 on Bag of Cement (Half still remains unused).
• 5 hours of personal time including prep, work, and cleanup.

Materials I already had included

• Bucket to mix concrete
• Cement trowel
• ABS Cement
• Saw

Finished Plumbing and Concrete

RRSP vs. Paying Down Debt

A close friend of mine, who is not to be named in this article, is in a bit of a pickle. They recently got a cheque in the mail, and wanted to know what to do with it.They don’t own a house, but somehow have mustered a $20,000.00 debt while buying the “car of their dreams” (and probably a few too many shoes) . They make a modest income, but spend poorly, and want to work on their debt. There’s a lot of articles out there on paying down mortgage vs. paying into RRSP, but, that’s not what we want to explore. A mortgage is a complicated beast in a labyrinth of twists and turns and changes. We just want a very specific question answered:

RRSP vs. Debt Alleviation

If you need to find out about RRSPs in general, first try this article over at the Starving Student Survival Strategies called RRSPs, I’ve got bigger things to worry about. It’s a great page on why you should invest in one, what it is, etc.

For dry technical information on RRSPs, please take a look at these resources:

• Government of Canada
• Wikipedia
• CBC In-Depth Report

Let’s get started.

Here’s a few facts we’ll need to start off with

• The cheque is for $2785.24
• The debt is $20,000.00 on line of credit (exactly how they got a line of credit without owning a house is beyond me).
• The interest on the debt is about 8% per year. Each month, the minimum payment is 3% (this includes the amount outstanding, PLUS monthly interest)
• Invested in an RRSP, the rate of return could probably be about 5%.

OK. We have just about everything we need to build a mathematical case… Read more!

What makes Lottario a better game than Lotto6/49

Lottario gets no love.

Sure, the 6/49 prizes might look tempting up front, but look a little further down the line, and you come to a neglected little game called Lottario.

In both games, 6 numbers plus a bonus number are chosen for each draw. This makes them very comparable.

Lottario

• Costs only 1 dollar
• 1 dollar will get you 2 sets of numbers (1 you choose, and 1 random)
• Guaranteed minimum $250,000 Jackpot.
• Draws once per week.
• EARLY BIRD jackpot (4 numbers chosen on the Friday before, must have all 4 numbers, like a whole seperate game with your ticket).
  

Lotto 6/49

• Each play costs $2.
• Draws held every Wednesday and Saturday.

The immediately visible benefits of playing Lottario are:

• cheaper
• 2 draws (including the early bird) on each play
• 1 dollar buys you 2 plays for each draw!
• That’s 4 plays for $1

Now, as my brother pointed out in the comments section of my previous article, what’s the comparison of prize? It’s tough to match apples to oranges, but we’ll give it a try using some numbers and various graphs and tables.

 Odds Tables

Lottario

Number of Matches	Win	Odds
6 of 6	44 % of the Pools Fund	“1 in 4,072,530.5″
5/6 + Bonus	5.4 % of the Pools Fund	“1 in 678,755.25″
5 of 6	19 % of the Pools Fund	“1 in 17,862.24″
4 of 6	31.6 % of the Pools Fund	1 in 366.6
3 of 6	$5	1 in 22.53
EARLY BIRD	“$50,000 (share equally)”	“1 in 4,966.75″
	Any prize	1 in 21

Lotto 6/49

Number of Matches	Win	Odds
6 of 6	80.5 % of the Pools Fund	“1 in 13,983,816″
5/6 + Bonus	5.75 % of the Pools Fund	“1 in 2,330,636″
5 of 6	4.75 % of the Pools Fund	“1 in 55,492″
4 of 6	9 % of the Pools Fund	“1 in 1,033″
3 of 6	$10 prize	1 in 57
2/6 + Bonus	$5 prize	1 in 81
	Any prize	1 in 32

 Odds of winning any prize

This one will be easy.

Winner: Lottario, 1 in 21
Loser: Lotto6/49, 1 in 32

Odds of winning a low end prize

Winner: Lotto 6/49, there are 2 different low end prizes ($5 and $10)
Loser : Lottario, only a single low end prize ($5)

Odds of winning medium and high range prizes vs. prize pool

In order to present this data to you, we’re going to have to make up an example minimum prize amount. We know that the published minimum for Lottario is $250,000 , but because the Lotto6/49 can grow over time, the jackpot prize can balloon to as high as $30,000,000 dollars. Because the last prize was won, I see the new jackpot number has been ‘reset’ to $4,000,000 dollars.

As you can see from the charts below, the distribution looks close. A few points I can see in the 3 charts below:

1. The odds-to-payout ratio seems to be a lot closer for 6/49, meaning, worse odds for a slightly elevated payout.
2. The games are designed similarly, they just operate in 2 different planes.
3. If you’re after the jackpot, Lottario may not be for you. Put it all in the 6/49.