Dave Ramsey on DVC

[bumbershoot]

He actually used to caveat Disney as the only exception.

Interesting.

they are at best taking money to easily do what a person could do themselves

As someone who used LT transfers rather than changing the DVC deed on my own, I know there are people who need that help. That said, I have always done the confused puppy dog look at those "sell my timeshare" companies since I know you can do it on your own. In 2006 my FIL died with a 1000 Trails "timeshare". It could be passed down two generations. My little family really wanted it. We had NO money for it. No one else wanted it. (FIL had purchased an RV and camping "timeshare" when he and my then-husband were the only ones who liked RVs or camping) It was approaching yearly dues time, and we couldn't do it. So...we turned it back into the company. Super-easy, actually. Not sure it would be the same for normal timeshares, but...

Jiffy lube doesn’t promise to change your oil and then fill your tank with water.

Jiffy Lube makes an implicit promise to totally close all the holes it opens, and yet they didn't do that with my car, causing a need for a rear axle replacement LOL. 'Twas a dramatic failure on the highway, that's for sure! When we were there with the manager letting him know he would be paying for the axle, there were MORE people in the waiting area who had had the same thing happen. Nothing to do with anything, but JL makes promises it doesn't keep.

Nobody should listen to anything Ramsey has to say about DVC (or really anything else), because Ramsey was on the take for TET.

Is "being paid for advertising on a show" really considered "being on the take"?

His first 4 baby steps saved our (veggie)bacon ages ago, FWIW. I now like the YouNeedABudget-style steps, but Jesse didn't have the platform that Dave has had for ages. I'm glad I listened to those 4 steps. Although we had just purchased DVC and we broke the vacations rule blatantly.

whom you posted earlier was not a scam

They said they don't think it was a scam. Not that it absolutely wasn't. FWIW. While we're being specific. Anyone can miss news stories.

It would be nice if Dave Ramsey stopped telling people that you can rent cars without a credit card - I hate being behind them in line at Orlando airport.

I've done it, though not because of DR. Post-divorce, my brand new and only CC in my name was secured and had a $300 limit, needed to rent a car. But I did my research and found out exactly what agency to use at the airport I was flying into. Of course...they required my SSN to do it. Which was wild. But I had no other choice. Then.

For example, "debt bad" works better than "you can probably invest if the interest rate is below 4% and you are controlling yourself" because the latter has too much nuance.

Exactly. I could go into a long story about my life (more importantly my now-ex's issues) and a "how I got here" story, but really, those 4 baby steps save people from ruin. It's the later stuff that gets dodgy. Nowadays I prefer Jesse Mecham's version of getting out of debt better.

Dave Ramsey is being sued based on his timeshare advice.

I think it's based on the company advertising on his show, not actual advice. His overall timeshare advice has always been "NO!!!!!"

 

[Huskerpaul]

I think it's based on the company advertising on his show, not actual advice. His overall timeshare advice has always been "NO!!!!!"

Dave is being sued because he claimed to be a financial advisor and vouched for his scum advertisers who scammed people for millions. Read the lawsuit yourself. Link below.

https://storage.courtlistener.com/recap/gov.uscourts.wawd.321558/gov.uscourts.wawd.321558.1.0.pdf

 

[DonMacGregor]

Is "being paid for advertising on a show" really considered "being on the take"?

No, but full-throated endorsements of companies that you know are the subject of numerous complaints, while stating that you are intimately familiar with the company, are a self-proclaimed financial expert and consultant, and can attest to the effectiveness of said companies, might be.

Ramsey assured his listeners that he had vetted Reed Hein and promised them that the company was the only trustworthy method to get out of their timeshare contracts. He called Reed Hein “legal specialists” and claimed the company had a proprietary process to achieve its “exits.”

I'll refer you to Paragraphs 6, 7, and 8 of the Complaint.

 

[crisi]

It's interesting to wonder how big that set is.

For example, I'm convinced one must understand (or at least appreciate) the time value of money to properly value any transaction--such as a loan or an investment--that takes place over time. Knowing this principle is a necessary but not sufficient requirement for financial literacy.

Take a random sample of 100 people. How many of them understand this?

Edited to add: I'm also reminded that I'm probably the last person who can rationally evaluate whether or not I "know how to spend correctly," because my emotions are also involved.

A little late to this - but another example is understanding (or appreciating) opportunity cost. If I spend $15k on DVC, I don't have $15k to __________ (go to Europe, pay for college, fix the roof, buy a new car, add to the pool I swim around in like Scrooge McDuck). Everyone, even billionaires, need to choose what to spend on and what not to spend on. Bill Gates has chosen to spend on malaria education. Jeff Bezos on shooting himself into space. And the idea works for time as well as money (if I use my vacation time to go to Disney, I won't have time to . . . . . ) or any limited resource.

I think if a majority of people understood just those two concepts, we'd be a lot close to universal financial literacy.

 

[upritbass]

A little late to this - but another example is understanding (or appreciating) opportunity cost. If I spend $15k on DVC, I don't have $15k to __________ (go to Europe, pay for college, fix the roof, buy a new car, add to the pool I swim around in like Scrooge McDuck). Everyone, even billionaires, need to choose what to spend on and what not to spend on. Bill Gates has chosen to spend on malaria education. Jeff Bezos on shooting himself into space. And the idea works for time as well as money (if I use my vacation time to go to Disney, I won't have time to . . . . . ) or any limited resource.

I think if a majority of people understood just those two concepts, we'd be a lot close to universal financial literacy.

Can’t go to Europe (health), kids left the nest a looong time ago, tile roof doesn’t need fixing, don’t need a new car (Mustang GT ’vert is doing just fine), already have a pool/spa.

If I use my time to go to Disney, I won’t have time to not go to Disney.

 

[Starport Seven-Five]

A little late to this - but another example is understanding (or appreciating) opportunity cost. If I spend $15k on DVC, I don't have $15k to __________ (go to Europe, pay for college, fix the roof, buy a new car, add to the pool I swim around in like Scrooge McDuck). Everyone, even billionaires, need to choose what to spend on and what not to spend on. Bill Gates has chosen to spend on malaria education. Jeff Bezos on shooting himself into space. And the idea works for time as well as money (if I use my vacation time to go to Disney, I won't have time to . . . . . ) or any limited resource.

I think if a majority of people understood just those two concepts, we'd be a lot close to universal financial literacy.

This more sounds like the concept of money being fungible than "opportunity cost" to me.

Also, I'm sure you know this but the list of examples scares me a bit because it includes a home repair item as an alternative use of the 15k. Funds for necessities like home repair should be bucketed and put away so they are not part of the pool of money someone is pulling from when considering a discretionary luxury purchase like DVC. That money should be invisible until it's needed.

 

[lovethesun12]

Everyone, even billionaires, need to choose what to spend on and what not to spend on. Bill Gates has chosen to spend on malaria education. Jeff Bezos on shooting himself into space. And the idea works for time as well as money (if I use my vacation time to go to Disney, I won't have time to . . . . . ) or any limited resource.

I think if a majority of people understood just those two concepts, we'd be a lot close to universal financial literacy.

I love how you mentioned Gates and Bezos choose to spend money on malaria and space education and not, say, their own private jets, lol.

I think most people that vacation (from away) at Disney would have to be somewhat financially literate. Well, other than Bill Gates and Jeff Bezos. They could team up and buy Disney and they would still be billionaires.

 

[AnnaKristoff2013]

As someone who used LT transfers rather than changing the DVC deed on my own, I know there are people who need that help.

LT Transfers isn't a timeshare exit company/scam, they are a resale closing/escrow company. They are fine. I was referring to timeshare exit companies. Those are all scams.

 

[Brian Noble]

There are other differences between LT Transfers and your garden variety exit company. LT is doing something (deed preparation) that is detailed and easy to get wrong, where getting it wrong can be a big problem. LT also charges a (very!) reasonable fee for that service of a few hundred bucks.

 

[MillauFr]

Dave is being sued because he claimed to be a financial advisor and vouched for his scum advertisers who scammed people for millions. Read the lawsuit yourself. Link below.

https://storage.courtlistener.com/recap/gov.uscourts.wawd.321558/gov.uscourts.wawd.321558.1.0.pdf

Yeah, people were actually paying Time Share Exit team to help them get out of their DVC and Marriott timeshares based on Dave's advice. Very poor look here for Dave.

 

[Bearval]

The loss in flexibility is a big problem. Taste, health, finances, and family change throughout life and having to go to Disney every year (more like every 3 years) to justify a significant non essential outlay is crazy. Only the craziest Disney fanatics can make DVC work and that’s who we are lol.

Our initial plan was to bank , borrow and go every three years so we only bought 75 points direct since that gave us 225 points to use and didnt need any more than that. Well that doesnt work if you go every year and we have added on a few resale points since then.

 

[Jayunit09]

Our initial plan was to bank , borrow and go every three years so we only bought 75 points direct since that gave us 225 points to use and didnt need any more than thait. Well that doesnt work if you go every year and we have added on a few resale points since then.

So far that is similar to our plan, every other year. We bought 150 originally and plan on staying in 2 bedrooms. We ended up buying another 50 point contract to give us 400 every other year. A 2 bedroom during school break in april for NH at our home resort is around 360 points. I wanted to be able to afford a 2 bedrooom and not touch points from any other use year but the two around that visit. If we have extra points, then I can rent them to friends or online. If we decide a 1 bedroom is fine, I can rent out a ton of points. I think there is plenty of flexibility due to being able to rent. Once the girls are out of school, if we dont need 400 points when we go, i can sell the 50 point contract, or we can just go together without kids.

 

[Disney_escape]

A little late to this - but another example is understanding (or appreciating) opportunity cost. If I spend $15k on DVC, I don't have $15k to __________ (go to Europe, pay for college, fix the roof, buy a new car, add to the pool I swim around in like Scrooge McDuck). Everyone, even billionaires, need to choose what to spend on and what not to spend on. Bill Gates has chosen to spend on malaria education. Jeff Bezos on shooting himself into space. And the idea works for time as well as money (if I use my vacation time to go to Disney, I won't have time to . . . . . ) or any limited resource.

I think if a majority of people understood just those two concepts, we'd be a lot close to universal financial literacy.

That's not really opportunity cost, its substitution. If you're using your college, home repair, etc money for DVC you are not being financially responsible- the same would be said if you were using said money to go to Europe. Everyone vacations different, but if Disney is something you like on a regular basis for many years, then DVC makes sense on several levels (emotional, financial, strategic, etc). Like the dining plan, many people love it- why? it doesn't make financial sense in most cases, but it does relieve some of the stress on the questioning the meal/$ choice everyday.
We used to go about every other year when our kids were younger, now that they are in college we go for 3 night trips several times a year. We used to 'do Disney as a sport' when kids were younger, now Disney is a fun relaxing getaway I look forward to a few weeks after getting home from the last trip (which makes may- sept difficult as we skip the summer) . If I had to pay $4-800/night every trip I would probably skip a few times, it's easier to make a large investment and then enjoy. Just like people buying a boat, bonus sports car, lake house, etc.

 

[crisi]

That's not really opportunity cost, its substitution. If you're using your college, home repair, etc money for DVC you are not being financially responsible- the same would be said if you were using said money to go to Europe. Everyone vacations different, but if Disney is something you like on a regular basis for many years, then DVC makes sense on several levels (emotional, financial, strategic, etc). Like the dining plan, many people love it- why? it doesn't make financial sense in most cases, but it does relieve some of the stress on the questioning the meal/$ choice everyday.
We used to go about every other year when our kids were younger, now that they are in college we go for 3 night trips several times a year. We used to 'do Disney as a sport' when kids were younger, now Disney is a fun relaxing getaway I look forward to a few weeks after getting home from the last trip (which makes may- sept difficult as we skip the summer) . If I had to pay $4-800/night every trip I would probably skip a few times, it's easier to make a large investment and then enjoy. Just like people buying a boat, bonus sports car, lake house, etc.

https://www.econlib.org/library/Topics/College/opportunitycost.html

 

[Disney_escape]

https://www.econlib.org/library/Topics/College/opportunitycost.html

You missed the point. Based on your definition everything in life is opportunity cost, and at a very basic level it is, but I believe there are priorities in life and not everything can be compared. But to each his own.

 

[Pyxie]

Timeshare exit brokers are not always scams, and I don't think the one he was recommending was a scam either. They're expensive but not as expensive as keeping an expensive timeshare that the owners do not want anymore and may not even be using anymore.

They may not all be scams, but Dave is currently in legal trouble over the one he promoted so I'd say there are bigger issues with that one and not just that it's "expensive."

 

[Starport Seven-Five]

https://www.econlib.org/library/Topics/College/opportunitycost.html

That definition is a bit weird and I'm unfamiliar with the source.

I typically see "Opportunity Cost" used more as the lost returns from spending it elsewhere, not the trade off of not being able to spend it on other items. The investopedia definition matches that usage:

https://www.investopedia.com/terms/o/opportunitycost.asp[/URL]]

What Is Opportunity Cost?​

Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked. Understanding the potential missed opportunities when a business or individual chooses one investment over another allows for better decision making.

The examples I regularly hear is comparing a potential investment against something basic like a CD or the historical returns on a total market index fund. That allows people to at least get a basis for if something is a good/bad investment from a purely financial standpoint.