Discussion in 'Purchasing DVC' started by MinniesYooHoo, Feb 19, 2013.
Timeshare sales has an agenda, sell, sell,sell and that's essentially it.
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I see what you're saying, but I don't necessarily agree. The problem is that people oftentimes reach for things that are beyond their financial grasp and often pay the consequences for years, if not decades. (I did this in my 20s and truly regretted it). If one actually took a look at the amount of interest they paid over the course of their lifetime it would be like a big slap in the face. If you can delay gratification and manage to acquire things you want without having to reach, you may find that you have actually increased your ability to acquire more things in the future. Think about how much money you would have to spend on DVC if you had no car payments, student loans or monthly credit card payments. Now imagine how much more money you would have if you had no mortgage on top of that! The problem is that making purchases such as DVC before you get to this point could prevent you from ever getting to this point in the future. The counter argument is that people would like to enjoy their lives while they're still living. But how much are you really enjoying yourself if you are financed to the hilt?
WOW! What a debate I have started over a little dreaming. I was beginning to think I was the scum of the earth just for having a car payment. I will reiterate: I don't have ANY credit card debt, or student loans. (My and my husbands student loans have been paid off for years.) We deposit into our savings accounts substantially every month so that we do have that "cushion" that we all should have. We invest in our retirement funds, and our daughters college fund soundly. I do have an investment portfolio. In all of the years I've been traveling to Disney (As a child since 1974, as an adult paying my own way since 1990. The year I graduated high school.), I've not ever once used a credit card to pay for my trips or used one while on vacation. I just figured that maybe DVC would be a smart decision for us as I will continue to go every year and sometimes multiple times in the same year. We usually stay Deluxe for an average trip length of 10 days. I thought DVC will save me money in the long run as once again I already have the financial means to take multiple trips a year without going into debt or stressing my finances in any way. I simply was wondering what kind of DVC advice the DVC experts would share with me. Sorry if this comes across as argumentative, I just never thought I'd feel the need to defend my financial security. Still love the DIS though! Thanks so much to those who did offer their suggestions on what has worked for their families. It has helped me in my decision. I think I will take your advice and buy a small resale contract and add onto it every so often until I have the number of points our family will be comfortable with. Now the fun starts!
Good luck with your search for a contract that works well for you! But, we still need you to submit your 2011 and 2012 W-2's and last three paystubs!
Okay I changed by mind on your 7500 dollars. Initially I said buy 50-60 point contract and save the rest for a rain day. Now, after hearing your story...
Spend the whole amount on a loaded DVC contract.
Time to spend money on "sensations" instead of "things". Good luck to you!
I think a lot of the points made in this thread were more general and not necessarily aimed directly to you. Sorry if you felt offended, and please don't feel that you have to justify yourself to anyone. I will say, though, that I didn't take your post as argumentative at all, so you clearly have a very nice way about you. The discussions on here are almost always theoretical because in actuality we never know the important details necessary in order to give specific advice. In order to give personalized advice, we would need three key pieces of information: What is your household income, what are your assets, and what are your household expenses? Since nobody is going to be so brash as to ask a poster "What do you earn?" and I doubt anybody is going to post that information on a public forum, we are at a loss for key information needed to accurately answer a poster's questions. So instead, we talk in theory that varies in the degree of applicability from one person to the next.
Based on the experiences of the people in this forum, I think the default is to caution people away from taking on too much risk with regards to DVC. The reason for this is because the longer you are on here, the more horror stories you will hear about people not being able to afford the maintenance fees, or having to give their contracts back to Disney after putting thousands of dollars into them because they can't afford the monthly payments, or being forced to sell and only getting back half of their purchase price. So in general the advice you are going to get is along the lines of "spend half as much as you were planning and save the other half in case of emergencies". Obviously if you already have that taken care of, this might not apply directly to you. Hope this helps clear some things up. Sorry that your thread took the (inevitable) turn that it did.
I did not read this whole thread, but I did read your posts.
If I had $7500 free and clear, and I enjoyed going to Disney World, I would definitely buy a resale contract within my budget. Good for you! Our DS's were already teens when DVC began, and a commitment to Disney vacations was not what we wanted. I think DVC is a good fit for your family. ( We were ready to buy later in life, nearer retirement and wanting to spend quality time with my Mom at Disney and the arrival of grandkids solidified our commitment to vacation at Disney, hence buying into DVC was good for us then. This year marks 10 years in the program! No regrets!)
It used to not be that way. Those who counseled financial caution were the minority, Then 2008 happened.
The other thing is that while we a writing in response to the op, or subsequent posts, we really don't know who is reading and extrapolating those answers to their dissimilar situation. A lot of people DO create unstable financial lives because they don't prioritize their needs over their wants, or prioritize their wants.
People have different levels of financial emotional comfort. Some are comfortable with a car loan and don't want to maximize wealth. Others need no debt, not even a mortgage, to be comfortable. Some are comfortable with nothing. When John d Rockefeller was asked how much money was enough, he answers "just a little more." And one of my friends has chosen to live out of her van, do her art, and work as a migrant worker. (I'm more along the lines of Rockefeller myself...I'm sure I can be comfortable with just a little more)
However, at some point each extreme is irresponsible. Not spending the money you have to enjoy your life because you want to accumulate more isn't healthy. Living only for today isn't either.
However, what I would ask everyone to do that is looking at DVC is ask themselves a few questions and be honest. Like, can I really afford this commitment long term. If I loose my job what happens. What am I giving up to own DVC. What other options are available for me to vacation. And listen to your own justifications....Disney is a great place to make memories with your family, but if that is your justification for making yourself financially uncomfortable with a DVC purchase, you might be better off investing in your family. Owning DVC is really neat, but if you want to own a piece of the magic and that is your justification, snow globes and stock are both more affordable. If you need a timeshare to force vacations, maybe you need to do a serious think about how you prioritize your time (and the answer might be that you do prefer to be at work).
If you find that your financial situation is comfortable, and DVC adds value and you can't think of anything better to do with the money, by all means buy DVC. And all of those statements mean different things to different people.
You asked what we would do and my advice remains the same. You're free to do whatever you want. I don't get it when people ask for advice then are offended by honest and appropriate advice.
To quote myself: This is the advice I asked for.
If you want to get the best deal possible at a DVC resort buy resale at the cheapest resort that you would not mind staying at if you could not switch at the 7 month mark. For purchase price, MF and contract length SSR is the best deal by far.
I totally agree with this advice.
The only thing I would add is to factor in closing costs that could be around $500 and if you have to pay MFs. These costs added around $1400 to the total when we bought our 160 point resale contract. If you can negotiate with a seller to pay one or both then your $7500 will go a lot farther.
I just have one thing to add: Two weeks ago on the Disney Wonder we were told that financing was now available for direct sales at 8%.
Just information, nothing else. Don't know if that was just for current members.
I also wonder if that is based on having a certain credit score and whether this is advertised as available but buyers are told that they don't qualify for that rate after they've already made a purchasing decision.
I would chip in a few dollars on top of the 7500 and buy 160 points at SSR.
Negotiate like a champ and try to get the buyer to pay most of the fees. Offer $50 per point until you find someone who will take it.
You will find that many on these boards will preach the adage of "no debt at any cost", but in reality it's all about balance and what you feel comfortable. For me it is mostly about liquidity.
For example, in this thread it has been suggested that you should not buy a luxury purchase if you have a car loan, well if you purchase your car brand new and you have outstanding credit, it is likely that you are paying little to no interest anyway. Why should you be in a hurry to pay off your car loan, and use up your cash, if it is not costing you anything?
That being said, part of being a responsible consumer is really knowing what you can and cannot afford regardless of what a sales person tells you. Sales people probably love and hate DW and I. For one thing, with major purchases we generally know whether or not we are going to buy before we even talk to a sales person, so they really don't have to convince us. On the other hand, we generally do not make good targets for sales people because the "pitch" generally does not work on us, because I refuse to make major purchases without taking the time to do the research. For example, we never talked to a DVC "guide" prior to purchasing. My brother was a DVC member and we stayed on his points one year. After that, I knew I wanted to purchase, so we contacted our guide and told him how many points we wanted and at what resort.
Many people are on edge since 2008 because of the state of the economy. Many who never expected to be out of work, suddenly found themselves out of work. However, some careers and jobs and locations are safer than others. Only you know how safe you feel with your career (not necessarily your current job) and what your contingency plan is.
As for DVC, we financed and it worked out well for us because we were able to buy into the resort we wanted (BLT) while we could still afford it. If we had waited until we had enough saved, we probably would not have bought at that resort or would have had to purchase fewer points.
As others have said, it all comes down to risk and how much are you are willing to risk for your vacations? In our case, I am willing to risk quite a bit because looking forward to vacations is what keeps me sane If my choice was complete financial stability without vacations or having a manageable amount of debt with my annual or semi-annual vacations, I'll take the later. The "trick" is knowing what is "manageable".
IMO debt if first and foremost psychology and only secondarily mathematics. In the context of a luxury purchase you don't need, my view is it's also all about risk. Obviously some situations and choices are more risky than others. When it comes to debt, control is only an illusion as the last few years remind us.
And there you have it,buy a resale contract that you're comfortable with . Again the cheapest are SSR and OKW, bearing in mind that with resale everything is negotiable.
Good luck in your search,
I think you make a lot of good points here, but I'd like to respectfully disagree with the statement in bold. This is a strategy that we have read about here on the boards often, and it makes sense...until you consider the alternatives. I agree with the statement that the difference in purchase price between the time the decision to buy was made and the time you are actually able to pay cash for the purchase can outweigh interest costs. However, what your strategy does not take into account is another alternative that might make even more sense. The fact is that during that period of time that you are saving for your purchase, resales for that resort will become available. If you wait and save long enough, the resale price will inevitably be lower than the direct purchase price you would have financed.
Again, taking emotion, joy of ownership and all of the other non tangible aspects of DVC ownership out of the picture, waiting for resales to come on the market and saving to pay cash up front would be a more fiscally prudent course of action.
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