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Dvc or no dvc
- Thread starter dreamteacher
- Start date
HollyAD
Well-Known Member
I say...You could die tomorrow and would your family say you wasted your time worrying about money? Or will they say you all had a great time visiting WDW and having an awesome family experience? Yes it is nice to be debt free but reality is different. Everything we know could be gone tomorrow. My father passed away when I was a child. We did not have much money but he made sure we took family vacations. I am sure a financial guru would have said to save that money. But we didn't. We had fun and made memories. Life isn't all about money.
DVCPluto
Well-Known Member
My DH was very skeptical of buying DVC since it was a timeshare. He did extensive research - spreadsheets out the wazoo. After what was way too long of a research time period for me, he felt more than comfortable buying. The resale market gives you that flexibility since price/pt keeps going up, and we could easily sell back. This is not true of most timeshares. HOWEVER, I'll never let our points be sold!!
GoofGoof
Premium Member
I hear what you are saying and agree. Just a point of clarification. The price to buy new points direct from Disney keeps going up (not a guarantee, but pretty likely to continue). There is no guarantee that the resale price will keep increasing. In the last few years there has been a gradual uptick in resale prices across the board, but for several years before that resale prices dropped (significantly at some resorts). As the contract approaches it's expiration it's value will naturally decrease. Another thing to consider is the cost to sell. Generally a 10% commission to the selling agent. When you do sell you will only get 90% of the point selling price. For example I bought my BLT points resale for $90/pt so I would need to sell them for $100/pt to break even. That's about where the resale market is right now for BLT.
Of course, I'm like you and don't plan on selling anyway so it's all academic to me. Plus you have all those years of vacations and memories while you owned it which is where the real value comes from IMHO
BigTxEars
Well-Known Member
Dave knows more than I do about money.
I know more than Dave on how I enjoy my life.
The two can meet and agree sometimes but in the end I win the battle for where my money goes. I agree buying on credit might not be a great ideal but if someone wants a DVC membership then they make that call. I won't second guess them for doing so.
Credit is not a evil thing IMO, it can be but not always. I mean if I can pay $25,000 cash for a new car or use credit and pay 3% interest on that loan but I can invest the $25,000 and earn more than 3% back am I not ahead?
Dave would know I'm sure
I know more than Dave on how I enjoy my life.
The two can meet and agree sometimes but in the end I win the battle for where my money goes. I agree buying on credit might not be a great ideal but if someone wants a DVC membership then they make that call. I won't second guess them for doing so.
Credit is not a evil thing IMO, it can be but not always. I mean if I can pay $25,000 cash for a new car or use credit and pay 3% interest on that loan but I can invest the $25,000 and earn more than 3% back am I not ahead?
Dave would know I'm sure
BigTxEars
Well-Known Member
Great point, I can earn more money, can't earn more time. Well I might with healthy eating but I ain't doing that!
Anybody remember Deepak Chopra? One of his "suggestions" was to eat room temprature food and liquids to improve your health. Now that might make all the medical sense in the world but I am not missing hot or cold food or liquids to live longer. Same thing with money IMO.
And anybody with older kids can tell you, those years when they are young...those never come back.
Enjoy them now, DVC can be a huge part of that. We have two WDW trips int he next 7 months. Each a week long, that would not have occurred without DVC.
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GoofGoof
Premium Member
This is very true. You can't take it with you. My kids are getting so big already.Great point, I can earn more money, can't earn more time.
And anybody with older kids can tell you, those years when they are young...those never come back.
Enjoy them now, DVC can be a huge part of that. We have two WDW trips int he next 7 months. Each a week long, that would not have occurred without DVC.
I agree that debt is not evil. Just like alcohol and chocolate cake aren't evil. In moderation all are part of a balanced and happy life. However, if abused and overdone they can also result in a diminished quality of life. Debt is ok when used appropriately. Most people need a mortgage to buy a house. Lots more need loans for college or to buy a car. Preaching a "debt free" life is not practical for most people. However, I have seen people's lives overrun by credit card debt. IMHO high interest debt used to finance non-essential purchases is a bad idea. Not good to be paying off a pair of shoes or a cruise for the next 30 years at 18% interest. DVC is a grey area. You do have a tangible asset with a resale value so it's not the same as financing a cruise or a trip that is gone once you purchase it, but the high interest rate negates a lot of the money saved by joining.
DVCPluto
Well-Known Member
I hear what you are saying and agree. Just a point of clarification. The price to buy new points direct from Disney keeps going up (not a guarantee, but pretty likely to continue). There is no guarantee that the resale price will keep increasing. In the last few years there has been a gradual uptick in resale prices across the board, but for several years before that resale prices dropped (significantly at some resorts). As the contract approaches it's expiration it's value will naturally decrease. Another thing to consider is the cost to sell. Generally a 10% commission to the selling agent. When you do sell you will only get 90% of the point selling price. For example I bought my BLT points resale for $90/pt so I would need to sell them for $100/pt to break even. That's about where the resale market is right now for BLT.
Of course, I'm like you and don't plan on selling anyway so it's all academic to me. Plus you have all those years of vacations and memories while you owned it which is where the real value comes from IMHO
Completely agree! We haven't gone through a drop in resale prices (yet - hope we don't), but we can't just look at it from where we bought to where we sold - those vacations cost something. I think if we get about 8-10 vacations in, we'd break even - so anything gained in selling would put us in the positive (but, again, if it's up to me - not happening!!)
The other thing we considered is where we get to stay with DVC. Prior to owning, we mostly stayed off property because it was cheaper. One of my dreams as a little kid was to stay at a monorail resort. My family never stayed on property. Not once. As an adult, I could never justify the price per room per night at CR, GF, or Poly - compared to a non-disney resort. Owning a piece of and being able to stay at BLT is my inner child's dream come true.
toolsnspools
Well-Known Member
Dave knows more than I do about money.
I know more than Dave on how I enjoy my life.
The two can meet and agree sometimes but in the end I win the battle for where my money goes. I agree buying on credit might not be a great ideal but if someone wants a DVC membership then they make that call. I won't second guess them for doing so.
Credit is not a evil thing IMO, it can be but not always. I mean if I can pay $25,000 cash for a new car or use credit and pay 3% interest on that loan but I can invest the $25,000 and earn more than 3% back am I not ahead?
Dave would know I'm sure
I'm not Dave, and I agree that Dave's plan is not for everyone. I don't necessarily think that ALL credit is bad either. In your example, you're only paying $27,350 for a $25,000 car. I do know that I quit smoking by focusing on the bad side of the habit and not the good side of it. Now I'm starting to look at credit in the same way.
If you're paying $25,000 for a DVC at 12% interest for 6 years, then you're paying $35,100 for the DVC. Ouch.
A $250,000 mortgage at 4.5% interest will cost you over $900 a month in interest for the first 2 1/2 years of the loan. That $27,000 paid in interest while you pay down only $10,000 in principle, just in the first 2 1/2 years. BTW - It takes 15 years for you to get to where you're paying more on principle than interest each month. Ever wonder why the mortgage company is so happy to help you re-fi every few years?
It certainly wouldn't take long to save up for a Disney vacation if I had the extra $900 a month to put away for the trip... I don't know how long it will take, or even if I can get to being totally debt free, but I can see the value in being there.
BigTxEars
Well-Known Member
No doubt credit can kill, it has severely wounded me in my younger days
In the car example above you do indeed pay $27,350 for a $25,000 car, but if you can get a return of $2,351 or more on that $25,000 you did not use to buy the car with cash then you come out ahead in the deal by my math. I guess it all depends on the interest rate. Let's say you can pay $25k cash or buy with no cash and 4% interest. If you can take the $25k and invest and get 5% interest back you should come out ahead. Very simple example and real life is not so simple but just a example.
I agree though that DVC is not a investment for gain other than fun
GoofGoof
Premium Member
I think the difference with a mortgage is 1) most people don't have $250K just laying around so debt free isn't an option right away 2) your house is your home. You need a roof over your head 3) most homes will go up in value (over the long run). You are paying that interest, but at least your investment is appreciating in value. Living debt free may not be possible for everyone, but trying to reduce interest rates and debt is usually a good practice. Going down to a 15 year mortgage from a 30 year can save you many thousands in interest with a marginal increase in monthly payment. I was able to re-Fi down to a 15 year at 2.5% interest a few years back. It's saving me about $150K in interest over the life of my mortgage.