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The Mathematical Case For Buying a Powerball Ticket
HughPickens.com writes Neil Irwin writes at the NYT that financially literate people like to complain that buying lottery tickets is among the silliest decisions a person could make but there are a couple of dimensions that these tut-tutted warnings miss, perhaps fueled by a class divide between those who commonly buy lottery tickets and those who choose to throw away money on other things like expensive wine or mansions. According to Irwin, as long as you think about the purchase of lottery tickets the right way — purely a consumption good, not an investment — it can be a completely rational decision. "Fantasizing about what you would do if you suddenly encountered great wealth is fun, and it is more fun if there some chance, however minuscule, that it could happen," says Irwin. "The $2 price for a ticket is a relatively small one to pay for the enjoyment of thinking through how you might organize your life differently if you had all those millions."
Right now the Multi-State Lottery Association estimates the chances of winning the grand prize at about 1 in 175 million, and the cash value of the prize at $337.8 million. The simplest math points to that $2 ticket having an expected value of about $1.93 so while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot. "I am the type of financial decision-maker who tracks bond and currency markets and builds elaborate spreadsheets to simulate outcomes of various retirement savings strategies," says Irwin. "I can easily afford to spend a few dollars on a Powerball ticket. Time to head to the convenience store and do just that."
Right now the Multi-State Lottery Association estimates the chances of winning the grand prize at about 1 in 175 million, and the cash value of the prize at $337.8 million. The simplest math points to that $2 ticket having an expected value of about $1.93 so while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot. "I am the type of financial decision-maker who tracks bond and currency markets and builds elaborate spreadsheets to simulate outcomes of various retirement savings strategies," says Irwin. "I can easily afford to spend a few dollars on a Powerball ticket. Time to head to the convenience store and do just that."
My odds of winning may be 1 in 175 million, but my odds of getting $337 million dollars any other way are 0 so it's not that bad.
Sure if I work hard and invest right I can earn a few million, but 175 million is just not going to happen any other way. I'm willing to spend a couple of dollars for that slim chance.
I still maintain that by not buying a ticket my odds of winning are not significantly reduced.
I figure the lottery is a tax on stupidity. And if it goes to $500 million I'm easily ten bucks' worth of stupid.
Not such a great proposition when you consider that your chance of being killed in a car accident on the way to the store exceeds your chance of winning the big one.
You probably have a better chance being eaten by a polar bear and a regular bear in the same day than winning the big prize on the lotto.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
An unchecked lottery ticket in my wallet. That way i am both potentially broke and wealthy at the same time.
Any insufficiently advanced magic is indistinguishable from technology.
Indeed. And our apartment was raising the rent by $150. So we found a house, and are now paying $100 less (after mortgage and escrow) each month, plus the enjoyment of simple things like being able to paint or remodel, and plant a garden or have a bonfire in the back yard. Seems like a solid choice despite the social contract.
I don't see my home as an investment. I'm buying the ability to knock down walls and move power outlets if I want to at a premium. Installing central air was expensive, but in my climate it's not very common. Somewhere down the line, I can install a hot tub in the back yard, again very expensively. I won't be able to get my investment back when I sell it...but it's worth it for me personally as an owner.
Definitely a good option in your case. In ours, we found a townhome that allows us to paint and do limited remodeling, and plant a garden. And if anything major goes wrong, we don't have to foot the bill. Oh, and there's rent control on the entire complex, so raising the rent is indexed against property taxes (meaning property tax would also be going up like this).
Other than as a financial investment, I really can't see the reason for buying a condominium though -- you pay just as much, and own no land (but still have conditions you must agree to about property use).
I'd buy land in a rural area if I could afford to live there -- but that's what retiring people tend to do, and it's bumping up the land value pretty much everywhere as the boomers retire.
$9k in 40 years will be worth what, $500 bucks in today's money before taxes?
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
Definitely a good option in your case. In ours, we found a townhome that allows us to paint and do limited remodeling, and plant a garden. And if anything major goes wrong, we don't have to foot the bill. Oh, and there's rent control on the entire complex, so raising the rent is indexed against property taxes (meaning property tax would also be going up like this).
Other than as a financial investment, I really can't see the reason for buying a condominium though -- you pay just as much, and own no land (but still have conditions you must agree to about property use).
I'd buy land in a rural area if I could afford to live there -- but that's what retiring people tend to do, and it's bumping up the land value pretty much everywhere as the boomers retire.
The big difference between renting and buying is that instead of throwing away money to pay someone else's mortgage, you are building equity in your own property. You do "own" a portion of the strata if you bought a "freehold" instead of a "leasehold". The latter is rent free for a period that is usually 99 years and after that date, you lose whatever value you had and have to enter into a lease with the land owner.
Jesus was a compassionate social conservative who called individuals to sin no more.
And watch my rent go up, or watch the landlord sell the place out from under me, or get foreclosed on, or decide to move in themselves? No thanks. I'm also paying a premium for stability. Yes it's dependent on keeping a stable job, but it really cuts down on the number of things that could force me to move. Peace of mind is invaluable.
Schrodinger's Ticket?
Mutant Freaks of Nature: "Frighteningly Addictive"
Optomist...
$9,000 US dollars in 40 years will be about $5.00 US value. In fact a large Coffee at starbucks will cost $10,000
Do not look at laser with remaining good eye.
The expected value of a gamble being positive does not necessarily mean it is a good idea for a limited human.
Consider, for example, a lottery which cost $50K to enter, and returned 10e80 dollars with probability 1 in 10 billion.
Expected value dictates that it's an absolute home run, but 99% of individuals would not take that bet, because with near-certainty it will bankrupt them.
Similarly, for most, a $1 bet for a $1M jackpot with 1 in 1.1 million odds (e.g. negative EV) is better than a $1 bet for a $10M jackpot with 1 in 9.9 million odds (e.g. positive EV).
Why? Because of the nonlinear value money has to an individual.
Mathematical case implies a relation to the probability of winning which is definitely not the case here. What's really meant is that there's a utilitarian case that, w/the usual hand waving, you can apply some dollar value to.
And in the meantime you are shelling out for taxes, maintenance, and being rooted in one area.
If you think that rental rates don't include the taxes and maintenance, you're naive.
And in many areas, house prices go down. So when you buy a house for an investment, you are really speculating
The question is not one of absolute values but of relative. "Buy instead of rent", not "buy for investment". When you leave a house, even if the value goes down, you still likely have some equity. When you rent you walk away with nothing.
The OP was saying that he was buying not for the investment but because he could install air conditioning and a hot tub even if he couldn't get his money back on them when he sells. He won't get his money back on them when he rents, either, so what's the reason to buy?
Yes, I know everyone in the media and our politicians calls home ownership an investment, but they are wrong. 2008 proved that.
2008 proved that people who bought houses they couldn't afford lost money. My house has doubled in value. When my bank offered me two options (fixed and ARM) I opted for the one I could afford. That meant looking five years down the road and seeing the balloon. There was no gun held to my head to pick the wrong option.
The people making money or I should say, making the decent returns, on your house are the banks.
Why yes, they make money off the loan (as they should -- they take a risk loaning money and they don't have it until I pay it back), but I will still have a good chunk of change should I ever decide to sell. Not as much money as I spent total, but nothing to sneeze at. And at no point in my loan was I ever upside down, simply because my eyes weren't bigger than my stomach.
What's wrong, did you buy a bubble-priced house in the People's Republic of California and end up underwater? Here in Texas, housing prices didn't skyrocket into the stupid. The other day I noticed a price for a comparable house (100sqft larger) a few blocks away that is about 70% more than what I paid for my house 14 years ago. At that price my loan is over 60% equity.
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The main reason the banks are profiting from on houses is because they have essentially socialized the risk of their investment while keeping the profits private. The reason for interest on loans is to overcome the opportunity cost of lending the money to a borrower in addition to the risk of default. Under a "normal" system, the 2008 housing crisis should have caused all the banks holding the loans to go under. The threat of this happening is what is supposed to prevent the banks from making risky investments in the first place.
But as it turns out, the actual risk to banks was much lower than it would have seemed, due to the bailouts. So in fact the banks don't have much risk in lending money if they are just going to get bailed out when shit hits the fan.
In this scenario, where you are essentially gambling with someone else's money (i.e. the tax payers), but get to keep the profits, the best move is to be as risky as you are able to get away with. In this light, the risky behavior of the banks makes a lot more sense.
And in the meantime you are shelling out for taxes, maintenance, and being rooted in one area.
Those are included in rent as well, just not broken out as line items, but they are there.
So, for a single family home that you live in, it is an expense. Yes, I know everyone in the media and our politicians calls home ownership an investment, but they are wrong. 2008 proved that.
It is both actually... the trick is not to move every 5-7 years...
I've been in my home for 10 years, at my current rate of payments, my mortgage will be paid off in the next 6 years. I'm not paying anything more per month than local rents for the same size house would cost, yet in 6 years, I'll own a $400k house free and clear.
That strikes me as an investment. Per month, I'm paying $3,000 including PITI and some extra towards principle. That $3K is about what the same house rents for.
Now it is true that I have to do repairs, replace the HVAC and water heaters, both of which I've done... but those rather pay for themselves when you're willing to buy the good units. My HVAC replacement was just over $17K for a pair of units (3,800sqft, so a 5 ton and a 3 ton unit). However they replaced a 15 year old 13 SEER single stage unit with a 16 SEER dual stage, dual speed unit. The savings in my electric and gas bills over 10 years makes the replacement free, vs. keeping the older units. Had a landlord done it, do you really think he would have put in such nice units into a rental house that he isn't paying the bills on?
Your equity? Let's put it this way, if Congress ever removes the mortgage interest deduction, attitude about homes being an investment will change. The people making money or I should say, making the decent returns, on your house are the banks.
Meh, at current rates, it isn't that big a deal... it is mostly in people's heads...
My current mortgage is 3.5%. The annual interest is less than $10K. It is a deduction, not a tax credit, so my actual savings from it is about $2,500 in taxes, give or take a few hundred. It is nice, but not the reason to own a home.
We have been programmed in our society to take on debt: cars, houses, education, etc ... And our tax system has also distorted how we "invest" our money.
Cars and education I agree with you, to a point... A car can be an investment if it lets you get to work. Leather seats and a V8 are not required for that however, those are luxuries.
Education? That can be an investment, if you pick the right major and go to cheaper schools and don't rack up stupid loan amounts.
Both can also be bad... it just depends...
Debt is a wonderful thing, if it makes you money, which it can... I've financed equipment and inventory purchases before and earned back many times the cost of debt. That is "good debt".
Putting a trip to Europe on the Visa that you can't pay at the end of the month? That is "bad debt".
It isn't complex, but debt can be both good and bad, depending on what it is used for.
Buying a house is fucking expensive. If you took the difference in cost (between renting and buying the same property), and put that in an index fund, there is a pretty good chance that you will have a bigger pile of cash saved up after 15 or 30 years than what you would have from selling your house at the end of your loan.
The big difference is that buying a house forces you to invest that extra money. That investment may or may not be a better investment than the stock market.
Buying a house even when it is a bad investment (i.e. loses money) leaves you better off during retirement than someone who spent all their money before retirement (depending on the value you place on the memories of spending all that money).
Under a "normal" system, the 2008 housing crisis should have caused all the banks holding the loans to go under. The threat of this happening is what is supposed to prevent the banks from making risky investments in the first place.
That's true. But the banks weren't allowed to properly evaluate the risks.
In this scenario, where you are essentially gambling with someone else's money (i.e. the tax payers)
Yes. And that's fair since it is the representatives of the taxpayer who forced the banks to ignore the risks and make the loans anyway. The Community Reinvestment Act was a legislative act that forced banks to make loans despite well-known and patently obvious risks. When a bank was required to include things like unemployment payments and ignore past credit histories when deciding which loans to approve (and how much money could be loaned), then those who forced the high risk loans should be the ones responsible when they fail.
That the "community activists" (ACORN, PUSH, etc.) jumped on the CRA bandwagon to threaten banks that didn't make enough risky loans with legal action is still a side-effect of the legislative regulations that our politicians enacted. Their actions led to the collapse. Be angry at them, not the people they forced to make the loans.
Read "Architects of Ruin" by Peter Schweitzer. It will open your eyes.
but get to keep the profits, the best move is to be as risky as you are able to get away with. In this light, the risky behavior of the banks makes a lot more sense.
Of course, businesses are in business to be as risky as they can get away with. Businesses that don't take risks don't remain in business -- the risk takers come eat their lunch. Heck, business that don't take risks don't become businesses in the first place.
But as ibid talks about, the environment of early bailouts was a contributing factor to the problem, but not the proximate cause. The fact that the US bailed out MEXICAN banks is, once again, a legislative failure that led to the collapse.
At least in the Bay Area the housing prices have recovered and are higher than ever. California recovered faster than most of the country. Even during the crash my house was still worth quite a bit more than I paid for it back in 1997.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
When I was renting, everything that needed to be repaired seemed to also be an excuse for raising the rent. When we had a hot summer and our air conditioning broke, our landlord claimed that fixing the AC cost so much that it necessitated a large rent increase.
With buying a house, our payments are fixed. Yes, repairs are our responsibility (and given that we have an older house, we've had more than our fair share), but those can either be prioritized (peeling paint comes after fixing a broken chimney) or done by ourselves to save money where possible. We can also hire people we prefer to do the job instead of dealing with whoever gave our landlord a lowball rate. (That AC repairman tried claiming that no central AC system could cool an apartment below 80. Odd since I grew up in a house with central AC and we could cool the house to 60 if we wanted to.)
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
The big difference between renting and buying is that instead of throwing away money to pay someone else's mortgage, you are building equity in your own property.
This was common sense in the 1960s and 1970s. Now with debt consolidation, second/third mortgages and other similar schemes, home equity is frequently tiny or illusory.
there's an excellent report on this matter that was published more than 10 years ago.
A Home Without Equity is Just a Rental with Debt:
http://papers.ssrn.com/sol3/pa...
lucm, indeed.
According to Numbeo, the buy/rent ratio in Seattle is 10. That'sobscenely expensive (Boston is 3), but that's still pocket change compared to Geneva, Switzerland, where it's 35!!! Look at the numbers, the price *per square meter* in Geneva is 2x the average monthly disposable income.
lucm, indeed.
So this woman goes in to church and prays to God.
"God, you know our situation. My husband is in the hospital. I can't find a job. Our kids are hungry. Our house is in foreclosure. We have no money to pay the bills. Please, God, if you would let me win the lottery, all of our problems would be solved."
Lottery comes and goes and the woman doesn't win. So she goes back to church and prays again.
"God, our situation has gotten worse. My husband is home from the hospital but is sick. All of the kids are now sick as well as hungry. The bank says they're going to kick us out of the house. The power and gas have been shut off. Please, God, let me win the lottery so that we can be happy and we will only take what we need to get back on our feet and then donate the rest to the church!"
Lottery comes and goes and the woman doesn't win. So she goes back to church and prays some more.
"God, we're in desperate straits. The police have kicked us out of our home. They bank has taken all of our posessions to pay off the debt. My husband and children are living in the park, but the police have threatened to kick us out of there. Please, God, don't forsake us! Help us by letting me win the lottery!"
Suddenly, she hears a booming voice say:
"Meet me halfway! Buy a ticket!"
Thanks. I'll be here all week.
The CRA did NOT cause the financial crisis! This has been debunked many times. In fact in ~75% of communities CRA loans had lower default rates through late 2009 than traditional conforming loans (let alone crap like interest only, sub-prime, and liar loans) due to more stringent underwriting criteria. No, the cause was improperly rated securities comprised of crap that was sold in bundles to the big banks and through the back door to Fannie and Freddie.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
True. However, it can be an investment that rides with inflation (like a tide lifting all boats). Though besides that, it's really good if you have children and need the extra room and a friendly community with good public schools.
OTOH, if you're single and young (in this economy for sure), renting is the way to go. You're not tied down both physically and emotionally. You're also nimble in both energy and extended employment opportunities. Once you buy a house, you're stuck unless you can find a buyer; then comes the time frame and move. Selling a house is a much bigger PITA then buying one.
Shorter version: Single, rent. Have a family, start looking at home ownership.
Life is not for the lazy.
I think you meant to say "just sayin'"
just sayin'
ôó
That's true. But the banks weren't allowed to properly evaluate the risks.
Yes. And that's fair since it is the representatives of the taxpayer who forced the banks to ignore the risks and make the loans anyway. The Community Reinvestment Act was a legislative act that forced banks to make loans despite well-known and patently obvious risks. When a bank was required to include things like unemployment payments and ignore past credit histories when deciding which loans to approve (and how much money could be loaned), then those who forced the high risk loans should be the ones responsible when they fail.
That the "community activists" (ACORN, PUSH, etc.) jumped on the CRA bandwagon to threaten banks that didn't make enough risky loans with legal action is still a side-effect of the legislative regulations that our politicians enacted. Their actions led to the collapse. Be angry at them, not the people they forced to make the loans.
I mostly agree with you, but consider the fact that the CRA really only got the ball rolling. The banks were forced to take on vastly more risk than they ever would have under normal circumstances and the pressure to do more of that was only increasing. The banks responded to increasingly frightening balance sheets and risk management warnings by investigating ways of continuing to provide ill-advised loans forced upon them by CRA and public policy without carrying the risk long terms. In other words, they needed a dumping ground for terribly risky debt. But since they couldn't force recipients of such loans to pay fair market rates (even bad loans tend toward absurd when you start talking about 25%+ interest rates), so they had to unload risky AND underpriced debt to someone. But what fool would buy up massive amounts of such debt (you know, besides the government)?
The answer came when banks began talking with large investment firms. They came up with the right packaging and labeling to get the debts into much more reasonable looking form that investors could be suckered into buying. It looked good on paper, so long as you didn't have the whole paper, and the investment companies ensured nobody did (including their own auditors, accountants, risk management officers, compliance officers, etc). Even the ratings agencies and regulators got snapshots tailored to fit the story being told. It all looked legitimate from ground level and nobody got the 30,000 foot view necessary to see the whole house of cards.
The result was magical: suddenly banks could move literally any amount of terrible mortgage debt off their books (given sufficient time) and investment firms had a hot new product to sink their investors' cash into. When banks and investment firms no longer had to remain separate for regulatory compliance, the wheels got greased that much more and it was off to the races. When the .com bubble burst and suddenly there were hordes of investors looking for the next big thing, the whole show went straight to ludicrous speed. Suddenly the banks had zero reason to care who was buying what for how much. They took a cut, the loans were off their books in months or even weeks, the investment firms got a cut, investors got an investment that was paying solid and consistent returns, the CRA pushers at HUD and other places were thrilled, and people who never would have stood a chance at buying a home (for blindingly obvious reasons) suddenly had no trouble at all buying anything they wanted and much much more.
It got to the point where the banks ran out of the "just below the cut" people HUD was pushing and so they relaxed standards even further. "Just put whatever you want on that income line, we aren't going to check, and the bigger the number you write there, the bigger the house you'll get!" Fake income still not enough? How about interest-only that'll require twenty times your annual salary in seven years? Ridiculous? Doesn't matter; not our problem. Just refinance or something before then! Don't have a job? Fuck i
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Quite a trick considering the broken social contract. No employer will employ anyone for the long term or take the risk to train someone for a particular job anymore. YOU take the long term risk. Your house payments are a liability.
Then why do you work for someone else?
I started my first business when I was 19 years old... other than a few bits here and there, I've worked for myself for over 20 years...
If you do want to work for someone else, if you live in a decent sized city, there is always work to be found...
Stop paying your property taxes if you believe that. We'll see how long that delusion persists.
Yea, and if I don't mow the lawn, the city will come do it and bill me a lot of money. I'll own the house free and clear from a mortgage payment, that should have been obvious... taxes are still a social obligation, but my taxes are about $500 a month, you can't rent a 5 bedroom house for $500 a month.
Time travel having yet to be perfected, that's as much a lottery as any ticket...
We'll need engineers in 20 years, that would be a fairly safe bet... Probably lawyers too... And doctors...
You look at the probability of that happening. Renting just means you're certain to lose.
Probability that I have no equity after 25 years of renting a property: 100%
Probability that some great disaster means I have no equity after owning a property for 25 years: less than 1%
I'll take the second odds.
Of course you should think of the "what ifs" before making financial decisions, but concentrating all on just the risks and not at all on the upside is every bit as silly as thinking of only the upsides and ignoring altogether the risks. A depression is a terrible time to not own property too by the way - you're pretty much just as shafted if your work sector has collapsed whether you rent or own.
Oolite: Elite-like game. For Mac, Linux and Windows
3, 33 or 333 millions. Would that make any difference? I don't think so.
It you want to calculate the expected gain then you should only consider the useful gain.
For me, 1 or 2 millions would be enough for the rest of my life so if I had to choose a lottery, I would pick one that maximize the probability to gain that amount. Any lottery with a smaller maximal gain (e.g. a few millions) but a higher probability is a better choice.
We'll need engineers in 20 years, that would be a fairly safe bet... Probably lawyers too... And doctors...
I'm not sure we need lawyers now, let alone in 20 years
Did you read the report before talking about short-sighted comments?
For those who don't want to read a 30-page report just to decide if you have a valid point (or if the report you linked is even relevant), I'll provide the summary that you should have provided, and try to guess at the argument you were trying to make (but didn't):
The report argued (in 2001, before the bubble and collapse) that much of the growth in housing was driven by relaxed lending which allowed more segments of the market to buy homes, and that this growth was driving an increase in prices. It further argued that if we saw a significant economic collapse, particularly a large rise in unemployment, that this effect could collapse.
Your argument, I presume, is that buying a house is risky because the price could collapse, leaving the borrower "upside down", holding a large debt they can't pay.
(Now we'll see if my AC stalker crapfloods responses to this post.)
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
If the odds are 1 in 175 million, then a $2 breaks even when the after tax, instant profit exceeds $350 million. In this particular jackpot was $564 million. Instant payment of $381 million. Now, taxes (and the chance of splitting it with others) makes this not a real investment, but it got pretty darn close.
But if the jackpot got to say $800 million, buying a ticket becomes a mathematically good bet.
But there are other things going on. Honestly, if you hit the jackpot for anything over 20 million, it won't make that much of a difference. It will radically change your life in pretty much the same way. Most likely you will gain somewhere between six months to one year of happiness, a year or so of realizing that things are going poorly and then the rest of you life with a CRAPLOAD of depression and anger about how everything went to hell.
Why? Because if you gain something too quickly and easily, you neither value it nor do you know how to maintain and keep it.
Chances are very high you will want to help out a few people you know that really need it, which will cause a bunch of people that don't really need it to come begging for help. If you turn them down, suddenly your friends turn on you. If you don't turn them down, suddenly you are broke.
Your leisure activities will dramatically change and your friends won't be able to afford to go with you unless you pay for them. Which turns the relationship from friends to hanger-ons. It's hard enough to keep family from disintegrating, let alone your friendships.
Honestly, my advice to anyone that wins is to REFUSE TO TELL ANYONE YOU WON. At most, tell them you won a smaller amount. Don't sign anything giving up your privacy, instead keep it a secret from EVERYONE you are not married to. Set up a Trust that will anonymously help people you think truly need it, and do NOT take credit for it.
You can't 'bring your friends' along for the lifestyle, but you can occasionally show them a fantastic time.
excitingthingstodo.blogspot.com
It's silly to say that it made more sense in the 60's and 70's than today, because nothing about the economics have changed, only the behavior of mortgage holders.
Even so, whether one is a better decision depends on the interest rates, the length of the mortgage, realtor fees, and what the market is doing. This calculator lets you figure it all out, and is actually a pretty impressive applet in terms of presenting information and allowing you to quickly get a grasp of all the variables in the problem: http://www.nytimes.com/interac...
The big thing that changes the equation the most IMO is going with a 15-year mortgage. Especially considering that rates are generally 1% lower on the shorter mortgage, it makes a dramatic difference in how your equity builds. For instance, on my home I could've taken a 30-year at 4.75% and paid $1100 a month, with maybe $100 of that going to principal. Instead, I'm paying $1400 a month on a 15-year @ 3.75% interest rate, with $700 going to principal every month. Think of it this way: would you pay $300 a month to get $600 more in equity every month?
Of course, the scenario changes as you get farther along in the mortgage, but conventional wisdom I've seen says that short mortgages are only for people who are intending to pay off a house and retire in it. Seems to me that short mortgages are best for anybody who doesn't like being a slave to the bank.