OK, Tell me how you'd spend my money!

[lovin'fl]

If you are indeed frugal and can watch your money and haven't made the plunge into to DVC I would purchase as much bang for my buck that I could. That would be SSR or OKW SSR can be had in the mid 50's so you could get 125-150 pts. Enough to decide if you want the obligation. Then I would save and if I wanted additional pts I would pay cash. I don't like debt on toys or luxury items myself. Good luck and hope the wind continues to blow money your way.

Hey Disbound...what happened with your contract in ROFR? Nevermind...just saw that you still have another week or so in ROFR.

 

[MinniesYooHoo]

I don't like debt on toys or luxury items myself.

I absolutely agree!! But I think my love of Disney is taking control of all rational thought!! All joking aside, I really don't mind going "into debt" for this. I don't make these kinds of purchases and am of the mindframe that if you can't pay outright (other than mortgages and so forth) you should wait and save. (Which we do.) But this is one of those that I may throw all caution to the wind and go for it! The vast majority of you are telling me to buy small contracts that I can pay cash for outright and add on until I have the number of points I'm comfortable with. I just don't quite know how many I would realistically need. We go at all times of the year and our average trip length is approximately 10 days. What number point are you all comfortable with and what are your criteria that you must have for your trips? (Time of year you go, length of stay, resort you like to stay at, etc...) I absolutely realize that these are all exceedingly variable but I am just interested in hearing some different scenarios.

 

[DougEMG]

I absolutely agree!! But I think my love of Disney is taking control of all rational thought!! All joking aside, I really don't mind going "into debt" for this. I don't make these kinds of purchases and am of the mindframe that if you can't pay outright (other than mortgages and so forth) you should wait and save. (Which we do.) But this is one of those that I may throw all caution to the wind and go for it! The vast majority of you are telling me to buy small contracts that I can pay cash for outright and add on until I have the number of points I'm comfortable with. I just don't quite know how many I would realistically need. We go at all times of the year and our average trip length is approximately 10 days. What number point are you all comfortable with and what are your criteria that you must have for your trips? (Time of year you go, length of stay, resort you like to stay at, etc...) I absolutely realize that these are all exceedingly variable but I am just interested in hearing some different scenarios.

Here's the details on my last trip and next two trips
Dec 2012, 15 nights, BWV 1 bedroom, standard view, 343 points
Mar 2013, 18 nights, BWV studio, standard view, 330 points
Sept 2013, 20 nights, BWV 1 bedroom, standard view, 435 points

You're going to get all kinds of different responses here, DVC is full all year long and people go from 1 day to 30+ days at a time. So you really need to decide when you want to go.

Take a look at the point charts for the resorts and see what it would take to do the types of trips you like. This will tell you how many points you want/need. Then you need to decide if you can afford to buy that many points and afford the ongoing yearly costs of going that often (MF, tickets, food, travel, etc).

Just realize that if you are buying DVC to save money, then financing your purchase over an extended length of time (more than 1-2 years) is going to make it impossible for you save money with DVC.

 

[Hunclemarco]

As far as point usage, you can go to www.tagrel.com Enter the dates you would be on vacation, and that will give you an idea of how many points you would use for a particular vacation, and the type of accomodations you'd choose. This will also show you how far your points will stretch. This may help you with your planning.

 

[ELMC]

I absolutely agree!! But I think my love of Disney is taking control of all rational thought!! All joking aside, I really don't mind going "into debt" for this. I don't make these kinds of purchases and am of the mindframe that if you can't pay outright (other than mortgages and so forth) you should wait and save. (Which we do.) But this is one of those that I may throw all caution to the wind and go for it! The vast majority of you are telling me to buy small contracts that I can pay cash for outright and add on until I have the number of points I'm comfortable with. I just don't quite know how many I would realistically need. We go at all times of the year and our average trip length is approximately 10 days. What number point are you all comfortable with and what are your criteria that you must have for your trips? (Time of year you go, length of stay, resort you like to stay at, etc...) I absolutely realize that these are all exceedingly variable but I am just interested in hearing some different scenarios.

While I understand your desire to do this, it's not like financing a car where you might get something like 6% and the price of the car stays the same whether you finance or pay cash. If you finance DVC the price doubles (direct vs. resale) and THEN the interest charges go on top of it. It's a pretty bad deal, financially speaking.

There is a happy medium, and that is financing a resale contract. The rates are still awful, but at least you're not paying a premium per point before you add in the interest charges. I'm also not too sure what the process is for getting financing for a resale purchase, but the kind folks at The Timeshare Store can walk you through that.

 

[Dean]

Thanks everyone for the input! I really appreciate it. I was just curious how other people would handle this. We don't have any debt other than the usual mortgage and a car payment so MF's are not a problem for us. We'd like to stay debt free of course, was just curoius if you all thought it would be smart to put that money as a down payment on a larger contract and finance the rest. I wouldn't mind a payment on that as I'm sure we would likely pay it off early. (We are very smart/frugal with our money.) Is this a bad idea, or would everyone just buy several smaller contracts? I consider myself a Disney World expert, but am absolutely a DVC novice. Thanks for the advice my DVC experts!

Your post seems to suggest that car payments are not only normal, but expected. Personally, I wouldn't buy with a car being financed, that's why I qualified my answer before. Assuming I had at least a 6 month emergency fund in place, I'd put the money toward the smallest car loan and then any remainder toward the other one. Then I'd start paying myself a car payment monthly in prep for the next vehicle and if there were anything left over, I'd start saving, possibly for DVC if that was the top item on my list.

 

[lovin'fl]

We bought 200 OKW points in 2006. We added on 75 HH points last January and, since Jan 2012, this is our usage:
Aug 2012- 4 nights in a 2BR at Vero Beach
Jan 2013- 5 nights in a 2BR at Beach Club (with annual pass...so we need to get in another trip this year)
Adding 100 AKV points (will be able to use them in about 1 month)
Dec 2013- 5 nights (12/20-25) in a 1BR booked at OKW (for MIL and FIL) and will book another 2BR (for my fam of 5) and a studio (for SIL2) hopefully at AKV (standard view).
This will eat into 2014 points, but not all...will leave 63 OKW and all 75 HH (plus 2 banked from 2013). We will book a few nights in HH for August 2014 with those 77 points and all 75 2015 points. We'll have to do something else, non-DVC, for vacation in 2014...maybe a cruise. And then back to WDW in 2015 with 363 points between OKW and AKV (100 points will be for MIL and FIL...they paid us, in 2009, to use half our OKW points...basically bought 100 of our 200 points. They pay half the MF each year and I book their resies for them).

 

[Kidanifan08]

. . . I think my love of Disney is taking control of all rational thought!! All joking aside, I really don't mind going "into debt" for this. . . But this is one of those that I may throw all caution to the wind and go for it! . . . I just don't quite know how many I would realistically need. . . .What number point are you all comfortable with and what are your criteria that you must have for your trips? . . . I absolutely realize that these are all exceedingly variable but I am just interested in hearing some different scenarios.

Be very careful not to drink the kool-aid too fast . . . you might get a brain freeze, or worse! Your current mode of traveling to Disney has no chance of putting you into debt . . . you can control when you do and don't give $$ to the mouse. With a DVC purchase, you are locked in for the life of your ownership. Throwing caution to the wind can be dangerous with a timeshare ownership. If you can't make your annual dues payment, you don't get to use your points and you may lose your contract. You need to figure our what fits into your annual budget and decide if you are ready to take that on.

Since you asked, our upcoming 10 night July stay in 2 BR's at BLT and AKV will be 469 points. Our recent 8 night stay in a savanna studio at Kidani the first week of December was 118 points. We are comfortable with the number of points we have. Our dues were just over $2700 this year, but that fits into our entertainment budget.

One thing you could consider is using the money you have now for a small resale, and then over time you could slowly do small direct add-ons as you are able to pay. For example, you could get a 150 point SSR via resale now. Then, when you have some more $$, you could add-on a minimum of 25 points direct, with a small closing cost. If you want to finance direct from DVC, there is a minimum purchase required. I cannot remember what the minimum is, I'm pretty sure it is over 100 points. The current finance charges are horrible -- 11-14%. Also, keep in mind that there will be about $400 in closing costs and between $500-$800 in current MF's for a small resale, on top of the cost of the points if you go that route today. Make sure you include those costs in what you are able to afford, if you do a small resale.

When you are crunching the numbers, closely consider what you currently spend on WDW lodging annually to determine what your true lodging costs are. Don't include the other extraneous costs (tickets, dining, travel), as those will still be there once you buy your DVC.

Good luck with you decision!

 

[zavandor]

Buying DVC is not the only option to visit WDW. You can pay cash for a room or rent points, or stay offsite.
Financing a purchase, unless you can have a very good rate, would eat up any saving that you could have. Why to get a debit and commit to DVC when for the same money you can rent points every year and stop visiting when you want or have a break and be debt free?

 

[disbound09]

Hey Disbound...what happened with your contract in ROFR? Nevermind...just saw that you still have another week or so in ROFR.

Checked yesterday and nothing yet. Kinda think it should be any day now. Then another 4-6 weeks waiting some more. Oh joy!

 

[disbound09]

Here's the details on my last trip and next two trips
Dec 2012, 15 nights, BWV 1 bedroom, standard view, 343 points
Mar 2013, 18 nights, BWV studio, standard view, 330 points
Sept 2013, 20 nights, BWV 1 bedroom, standard view, 435 points

Wow those are some true vacations. Mine are 10 days max, I am jealous!

 

[AnnaS]

I have bought all my contracts direct - including my son's recent purchase.

For you to get the most bang for your money - start looking for a resale contract. Don't jump in all at once. Use it a year or two - know the in's and out's, etc. and start looking for a resale again when ready or add small contracts paying cash through Disney. You won't be able to stay as long as you want or get the 2BDR for many nights - but again - see what's involved before getting in too far and fast at once.

Good luck and let us know what you decide!!!

 

[geraghty]

Your post seems to suggest that car payments are not only normal, but expected. Personally, I wouldn't buy with a car being financed, that's why I qualified my answer before. Assuming I had at least a 6 month emergency fund in place, I'd put the money toward the smallest car loan and then any remainder toward the other one. Then I'd start paying myself a car payment monthly in prep for the next vehicle and if there were anything left over, I'd start saving, possibly for DVC if that was the top item on my list.

You got forgot to tell her to buy your dvd on financial peace.

Although I agree with these comments, she is already going to disney world at least once a year and if she does not blow this money on joining the dvc will probably spend on a worse investment. Given your situation I would look at how much you spent on lodging on your last disney trip. My guess for a week or longer trip at animal kingdom or equivalent it was well over two thousand dollars if paying cash. You would definitely save a lot of money paying mf's rather than cash, but the problem is how many points do you actually need to stay where you want? That is a question only you can answer. You will have to look at the point charts and breakdown how many points it will take for the time of year you want to go, how long you want to stay and the lowest point accomodation you can be happy with. I would also look at your next trip that you're already planning and use disney's website to figure see exactly what your room is going to cost. I would then throw in the difference between what your room would cost if paying cash or renting points and add that to your $7,500. I don't think a 150 point contract is going to kill you with mf's. Anyone who vacations at disney world as often as you say you do, is spending thousands of dollars a year on loding any way. Plus the money you save on lodging every year can go into an account to purchase future add ons.

Now come back to the real world. I do agree with Dave Ramsey's comments and I do not have a car payment. I would use this money to pay off debt. (like your car or cars), mortgage and would have an emergency fund, but I am spending your money and I really don't care about the smart financial decisions.

 

[rojen]

What's the interest rate on your car loan? My credit union has a 2.75% rate right now. If you're paying that low a rate, paying it off early isn't really saving you much when you consider inflation and the time value of money.

You'll get a lot of people on this board who think that debt is the worst thing ever. It's not, it's just not a good thing. If you can manage your monthly payments and have left over money for emergencies and savings, no worries. I definitely wouldn't finance with a 10-12% time share loan, but if you can get a reasonable HELOC or refinance a car and cash out the equity, go for it. You'll pay less per point if you buy a bigger contract. That'll wipe out a lot of the bite of paying interest. You could also look into renting some of your points if you buy a larger contract, using that money to pay MF or the loan back.

I recently came into a big chunk of money and bought a 200 point contract. I'm very happy that it all worked out that way. We can afford Disney, but never really had the upfront costs of a DVC membership in liquid form.

 

[puffkin]

It never ceases to amaze me the extremes you find on these boards (and in life). The people who think nothing of dropping $20K cash on a DVC contract or those that are mortgaged/in debt to the hilt and still taking $10K vacations every year. Then you have all the people in the middle, like me.

I think there is a big difference between doing what is financially 100% right and doing something that adds positive value to your life. Yes, the black and white answer is to have no debt. But for many of us, that would mean I would not have (at this point) 7 YEARS of awesome memories with my kids at WDW. My kids won't be little for long. DVC has been a big part of making us "commit" to vacations and family time. Because at home, life just gets in the way sometimes. It just happens.

If you have reasonable debt (mortgage, car payment, student loan), savings/retirement plan, and no problems making your monthly payments then I say go for it. Do your research and make sure it is right for you and your family's needs and by the contract that fits that. And enjoy living your life in actuality and not just living on paper through a financial portfolio. You can't take it with you

 

[ELMC]

What's the interest rate on your car loan? My credit union has a 2.75% rate right now. If you're paying that low a rate, paying it off early isn't really saving you much when you consider inflation and the time value of money.

You'll get a lot of people on this board who think that debt is the worst thing ever. It's not, it's just not a good thing. If you can manage your monthly payments and have left over money for emergencies and savings, no worries. I definitely wouldn't finance with a 10-12% time share loan, but if you can get a reasonable HELOC or refinance a car and cash out the equity, go for it. You'll pay less per point if you buy a bigger contract. That'll wipe out a lot of the bite of paying interest. You could also look into renting some of your points if you buy a larger contract, using that money to pay MF or the loan back.

I recently came into a big chunk of money and bought a 200 point contract. I'm very happy that it all worked out that way. We can afford Disney, but never really had the upfront costs of a DVC membership in liquid form.

Debt is only a useful tool if having the debt helps you achieve a positive outcome. A simple example of this would be leveraging debt (carrying a loan at 3% while simultaneously investing money at 8%). A more complicated example would be a situation where debt carries tax deductible interest that could put you into a lower tax bracket. Wealth is built by collecting interest, not paying it. So while it may not be "the worst thing ever", paying interest is throwing money out the window.

 

[ELMC]

It never ceases to amaze me the extremes you find on these boards (and in life). The people who think nothing of dropping $20K cash on a DVC contract or those that are mortgaged/in debt to the hilt and still taking $10K vacations every year. Then you have all the people in the middle, like me.

I think there is a big difference between doing what is financially 100% right and doing something that adds positive value to your life. Yes, the black and white answer is to have no debt. But for many of us, that would mean I would not have (at this point) 7 YEARS of awesome memories with my kids at WDW. My kids won't be little for long. DVC has been a big part of making us "commit" to vacations and family time. Because at home, life just gets in the way sometimes. It just happens.

If you have reasonable debt (mortgage, car payment, student loan), savings/retirement plan, and no problems making your monthly payments then I say go for it. Do your research and make sure it is right for you and your family's needs and by the contract that fits that. And enjoy living your life in actuality and not just living on paper through a financial portfolio. You can't take it with you

I understand what you are saying and I think there is a fine line to walk between achieving maximum financial responsibility and actually living life to enjoy life. But I think that there is this misconception floating around out there that DVC is the key to making memories on vacation with one's family. Hundreds of thousands of people visit Disney every year without even knowing about DVC, and I'm sure they have a wonderful time. I understand the "forced vacation" aspect of owning a timeshare, but that is an idea constructed by timeshare salespeople and not an actual necessity. We all have busy lives, but I don't subscribe to the theory that I need to purchase an expensive timeshare to tell me when it is time to go on vacation. I think that is an imaginary benefit built into timeshares in order to increase their perceived value.

We see it on the boards a lot, people talking about how if they don't buy DVC then they won't be able to take trips to Disney. There are many ways to visit Disney outside of DVC, and most of them are more cost effective both in the short term and the long run. I think that it is important to separate owning DVC from the actual ability to vacation at WDW, because one is not necessary to achieve the other.

(PS I know about the multi quote feature, but the second post wasn't up when I responded to the first).

 

[DougEMG]

I understand what you are saying and I think there is a fine line to walk between achieving maximum financial responsibility and actually living life to enjoy life. But I think that there is this misconception floating around out there that DVC is the key to making memories on vacation with one's family. Hundreds of thousands of people visit Disney every year without even knowing about DVC, and I'm sure they have a wonderful time. I understand the "forced vacation" aspect of owning a timeshare, but that is an idea constructed by timeshare salespeople and not an actual necessity. We all have busy lives, but I don't subscribe to the theory that I need to purchase an expensive timeshare to tell me when it is time to go on vacation. I think that is an imaginary benefit built into timeshares in order to increase their perceived value.

We see it on the boards a lot, people talking about how if they don't buy DVC then they won't be able to take trips to Disney. There are many ways to visit Disney outside of DVC, and most of them are more cost effective both in the short term and the long run. I think that it is important to separate owning DVC from the actual ability to vacation at WDW, because one is not necessary to achieve the other.

Exactly...

 

[Dean]

You got forgot to tell her to buy your dvd on financial peace.

Although I agree with these comments, she is already going to disney world at least once a year and if she does not blow this money on joining the dvc will probably spend on a worse investment. Given your situation I would look at how much you spent on lodging on your last disney trip. My guess for a week or longer trip at animal kingdom or equivalent it was well over two thousand dollars if paying cash. You would definitely save a lot of money paying mf's rather than cash, but the problem is how many points do you actually need to stay where you want? That is a question only you can answer. You will have to look at the point charts and breakdown how many points it will take for the time of year you want to go, how long you want to stay and the lowest point accomodation you can be happy with. I would also look at your next trip that you're already planning and use disney's website to figure see exactly what your room is going to cost. I would then throw in the difference between what your room would cost if paying cash or renting points and add that to your $7,500. I don't think a 150 point contract is going to kill you with mf's. Anyone who vacations at disney world as often as you say you do, is spending thousands of dollars a year on loding any way. Plus the money you save on lodging every year can go into an account to purchase future add ons.

Now come back to the real world. I do agree with Dave Ramsey's comments and I do not have a car payment. I would use this money to pay off debt. (like your car or cars), mortgage and would have an emergency fund, but I am spending your money and I really don't care about the smart financial decisions.

Making bad choices does not legitimize an additional one. This site abounds with people who overextended themselves on buying and think it's a good idea to do so. To me it's more about managing risk than anything else and I could not with good conscious recommend someone buy in this situation but then again I don't feel they should go on vacation either if they don't have their house in order and certainly not somewhere as expensive as Disney.

I think there is a big difference between doing what is financially 100% right and doing something that adds positive value to your life. Yes, the black and white answer is to have no debt. But for many of us, that would mean I would not have (at this point) 7 YEARS of awesome memories with my kids at WDW. My kids won't be little for long. DVC has been a big part of making us "commit" to vacations and family time. Because at home, life just gets in the way sometimes. It just happens.

If you have reasonable debt (mortgage, car payment, student loan), savings/retirement plan, and no problems making your monthly payments then I say go for it. Do your research and make sure it is right for you and your family's needs and by the contract that fits that. And enjoy living your life in actuality and not just living on paper through a financial portfolio. You can't take it with you

I don't agree at all, surprise. As I noted above, it's about managing risk but it's also about creating good habits vs bad. If you buy the car you can't afford, then buy DVC you can't afford and stretch on the house more than you can afford; well that's what got us all into this mess to start with. IMO if it's important and you can afford it, you can figure out a way to save and buy in and if you can't then don't buy. Don't think of me as a nay sayer but rather as a cheerleader.

 

[Illini Al]

I generally agree with all of what Dean has said. People living above their means is what has caused a lot of our country's financial mess we're in (that and greedy bankers). With that said, if people bought DVC only if they had no other debt or financial obligations, DVD would still be trying to sell out OKW. In addition, for my current search of a resale contract, I'd have a choice of about 6 contracts, instead of 600.