DVC - Running Rough #'s

[DizneeRX]

Actually, I thought of something significant that didn't get factored into DizneeRX's numbers.

You said I could just save the money I spent on DVC and in 40 years (or whatever) I'd have enough to pay for my $1,000 a night room.

Actually, that's not what I said. I was pointing out that $71.00 today is essentially the same as $1000 or $1100 in 40 years. It sounds like a huge difference, but it really isn't. If you could walk into a McDonalds today and get a hamburger, fries and a coke for $.35 you' be pretty happy. But 40 years ago, that's what it cost. same thing here with cost of the room - $71 today - $1000 in 40 years...no difference.


I think you may have missed the point. I'm not saying that it is not a good deal for you - that's something only you can decide. What I was trying to point out (and this is a big pet peeve of mine) was that you should look at all aspects of the situation. You spent $15000. There are other things to consider - Did you spend any more? Are you financing this? What is the annual fee? is there a maintenance fee? Can the annual fee increase? How much can they increase? What happens if they discover oil in Florida and Disney is bought out by an oil company and they tear down your hotel to put in drilling platforms? (just want to see if you're still reading). I'm not a big fan of salesman and the comparison in your earlier note is typical "Sales Speak" - your only paying $71 when the next guy is going to pay $1000 in 40 years. Yeah, and my Honda Accord is probably going to cost $150,000 then, too. so what? You're comparing apples to...well, something that's not apples.

So if you're paying, just a guess - $500 - $700 annually as a maintenance fee? (How long will that get you in a value resort?) And I'm not sure if you are financing this or paying cash. But, financing this ($15000 @ 7% over 5 years) will cost you an additional $3000 or so. That adds to the $15000 total. I'm sure that's still a good deal for you. But for some else, those little extras may push them to the other side of the fence.

[BigRedDad]

A lot of good info here. I wasn't expecting this type of response.

Since the numbers are statistically driven, anyone can make them look good or bad. What the initial numbers were to indicate is how many years it takes to hit a break even point. In the lone example, it takes 5 years. The financials over 5 years will not change as drastically as it would over 40.

What the numbers did show is:
1. If you can live without financing the large initial down payment
2. Plan to visit often enough (I am not sure how long you can bank points, so I used a general number)

That this can be a wise investment in family happiness over many years.

Many families cannot afford to shell out this kind of money. For me to get $18k of liquid cash would take some time. Between 401k, IRA, College fund for DD1, mortgage, yada yada yada, it will take several years to get the much money. My wife and I make a very good combined income. But all of the little chunks here and there make it seem like we don't make much.

[MarkC]

I feel your pain. It's a lot of money for most of us. We went the resale market and paid 1/2 that amount. As other people have posted, if you look at this strictly as a financial decision over the next few years, you can make the numbers move either way. If you figure your kids and grandkids will enjoy this for the next 35-47 years (depending on your resort), that makes the numbers inconsequential. I still think that the numbers work, even it was only for 10 years if you really used it every year. I don't necessarily agree with the 5-7 year cutoff unless you go at peak season. This does become strictly an individual/family decision and is not for everyone. However, I have checked out other timeshares and Disney does seem to have the best plan available anywhere. Not to mention it's at Disney.

[locodemickey]

Anyone can run numbers and make them come out either favorable or unfavorable. One thing-- I am NOT planning on paying any maintenance fees. I will use the Disney Visa Rewards to pay for them. My initial outlay will be it. Even as the fees increase, so will everything else that I pay with my Visa. So for me, knowing we want to vacation at Disney yearly and stay at the Beach Club, it makes financial sense. Yes, we could stay home or stay someplace cheaper but that is the lifestyle/family issues coming into play. To each his own.

But you ARE paying the dues....you have to think opportunity cost - you could have used the money from the Visa for something else. You are just choosing to put it toward the dues.

[Ian]

And about prepaying for food and gas - My point wasn't that food prices haven't risen - of course they have. My point was that prepaying for food would not be the better financial decision. This is off the top of my head, but if I'm not mistaken, the highest annual average inflation rate over the last 10 years has been about 3.4 - 3.5 %. (There have been months where higher #'s have been reported, but these #'s have been scaled down or offset by much lower #'s in following months.) Right now, I can get a 5 year cd with an apy of 5.33%. Would I rather pre-pay for something and save the inflation? or invest the money in a cd @ 5.3%? That's a pretty simple decision.

It's a simple decision if you want to starve! It's kinda hard to buy food with your money if it's tied up in a CD.

Which is the same with DVC ... yeah I could invest the money, but I wouldn't have the vacations.

[disneycouple2004]

OK that was alot of reading..and it kinda stressed me out...DVC membership to us is what is called owning a piece of the magic !!
we tried to do the numbers also..we had alot of what, if, when, and why...but after we purchased and made a trip or 2..we understand now..it gives us something to really look forward to every year..our accomodations are excellent no matter where we stay, we are treated above and beyond anything we could ask for..we enjoy all the perks, and i know Disney planned it this way, but its gives us a reason to go more often than we would if not for DVC..i understand the money, and we are by no means wealthy...but its worth every dime to us !!

life is short
have some fun !!

[DizneeRX]

It's a simple decision if you want to starve! It's kinda hard to buy food with your money if it's tied up in a CD.

Which is the same with DVC ... yeah I could invest the money, but I wouldn't have the vacations.

Okay, I'll try this one more time. This time I'll type slowly so it is easier for you to understand...

Maybe this will be a little easier for you...MY WAY: You put your money in the bank (ING - 5% interest). When you need food, take out the money and buy the food. When you're done buying and eating the food, you have money left over in the bank (interest - because your interest rate is higher than the inflation rate).

YOUR WAY: You give your money to the "food guy". He gives you food to eat. You eat the food and have no money left. Meanwhile, "food guy" has your money invested.

Common sense seems to be failing us here...

[dlpmikki]

Moderator Alert

Gentlemen, we are covering a lot of ground that has already been covered in the 'Why not to buy DVC' sticky thread. We are also getting a bit repetitive! Please be polite to each other as well - different views are allowed / encouraged but being rude or insinuating negative things about people with opposing views is not.

[Ian]

MY WAY: You put your money in the bank (ING - 5% interest). When you need food, take out the money and buy the food. When you're done buying and eating the food, you have money left over in the bank (interest - because your interest rate is higher than the inflation rate).

But I just finished showing you how, with that model, the money lasts less than five years.

So I'm not sure which one of us is actually confused, but I suspect it isn't me.

[Maleficent's Dad]

I'll give you an example that may be a bit more simple to understand.

I am a DVC owner and have been for years - I'm happy and admittedly biased that it's a great thing.

A close friend of mine recently went to WDW during President's Week. Here's his story:

He travelled with his GF, her two children, and himself. They stayed at the Grand Floridian. They bought Park Hoppers. They had 1-2 sit down meals a day. They really didn't spare any expenses when it came to the kids.

To make a longer story longer, he dropped about $7000 for the one week stay. When he looked into DVC and realized his ONE vacation could have been 50% of his DVC purchase, he nearly dropped.

Sure his $7000 wouldn't have included airfare, park tickets, etc., but it would have gone a long way to ensuring a life of family vacations!

Essentially, DVC is an investment of money and emotions. One of the reasons we love it so much is that no matter when you go, you've got to be planning or thinking about your next trip as soon as you get back!

[DizneeRX]

But I just finished showing you how, with that model, the money lasts less than five years.

So I'm not sure which one of us is actually confused, but I suspect it isn't me.

About the confusion - You might want to go back and re-read the thread if you have the time (and I dare say, with 22,000+ posts, it seems as though you have some time to spare...) But since I'm in a good mood, I'll be nice and point you in the right direction - this was in reference to your comment about pre-paying food, not buying a timeshare.

And since you mentioned it, you still haven't explained how the maintenance / annual fee, increases to the annual fees, other charges and interest paid on your timeshare "mortgage" factor into your model. Your previous post didn't really show anything, except perhaps that you neglected to take quite a few factors into consideration.