Does anyone else think the OKW 15 year extension will add value?

[Mtnman44]

LOL- nice attitude for a DISCUSSION forum. FYI: There are plenty of people that don't understand these simple concepts...

Again - whatever logic/justification floats your boat. Define "investment" however you like in regard to resale value or anything else you like. If you consider your purchase of DVC as far as resale purposes, I cannot imagine why anyone would buy DVC or any timeshare in the first place.

Stop it already - will you? This is getting really ridiculous. We can all make endless analogies explaining present and future values - most people have been through basic accounting and finance - we don't need the lecture yet again here (there are already quite a few) and that is not the issue. The issue is simply that neither you, nor anyone else has any idea what a night at Disney will cost in 35 years. Simple as that. What if we see inflation rates in excess of 10% for a few years, or going to the extreme the US dollar is devalued and that Dodge Viper costs $300,000 in 2042 in present day dollars? Then that $15,000 you paid today seems to be quite a bargain - doesn't it? That's the only point we need to make - nobody knows what a night will cost in 35 years. Shall we go back 35 years and see what nights at Disney were going for then and apply the same rate increase looking 35 years into the future?

Spare me the lectures and examples of investing in the stock market, your favorite low-cost index mutual fund, a CD, a car, or anything else - it has absolutely no applicability here.

Oh yeah - we've also prepaid for our daughter's college tuition - all 4 years of it. She won't be attending college for another 8 years, but it is all paid for - GUARANTEED. Now, we get mail every week (as I'm sure many do) from some broker or mutual fund company expounding the benefits of saving through a 529 college savings plan in some mutual fund and how with historical market returns we'd have so much money in so many years. Funny, but not one of them will guarantee that if I give them the full amount that we've prepaid to guaranteee tuition coverage in the prepaid plan, in 8 years that it will grow to be enough money to cover then current tuition rates - or better yet even guarantee that it will not drop in value. Why in the world would I do that if I can pay a lump sum today and guarantee that all 4 years of tuition are entirely covered? That is the analogy that applies here.

 

[shellbelle1971]

wow thats some fun yet odd math

where are you getting:

"something like $30 for the extension" from?

I believe the current offer is $15 pp for the extension, but Disney has said something to the effect that after Feb. or March the cost to extend will go up to $30? I don't know the specifics. We haven't looked at it really closely because we don't own OKW.

 

[DisneydaveCT]

As I have seen on this board, and over at ***********, one can easily work the financial numbers to prove your point either way.

For example, when I add the $15 per point extension to my original investment on a per point basis, I am only a couple dollars per point above the current resale rate for buying an OKW contract today. Thanks to Disney exercising its ROFR, many OKW owners can potentially realize a profit on their original investment. (My original purchase price per point was in the mid 60's.)

I doubt that Disney will allow the price of OKW points to drop too much in the future. Afterall, if the OKW price drops too far, people will be purchasing OKW contracts on the secondary market instead of purchasing new contracts at SSR or any future project.

In talking with other DVC members, I have found some members who made their decision to make the initial investment soley on how much their Disney vacations will cost in their lifetime, and not as an option for leaving their DVC membership to their children and grandchildren. For them the length of the contract is not as important as their cash outlay. For me, leaving the DVC membership to my children and grandchildren was very much part of the decision making process, both at the initial investment (1995) and the recent decision to extend the membership.

Another way to look at the question of extending or not extending is that DVC is offering you the option to extend your contract for $1 per point per year for the extension period. My initial investment was approximately $1.50 per point per year of the original contract. If you purchase a new contract at SSR, not a resale, you will be paying approximately $2.25 per point for a SSR contract that will have less than 50 years of life. Whereas, by excercising the extension option, I will have paid $2.50 per point for a membership that eventually will have brought joy to me and my family for over 60 years. (By the way, I do not include annual dues in my figures.)

I could join others who want to wait to pay for an extension closer to the end of the initial contract, but then I will likely pay a higher rate. Just remember the OKW members who debated for a number of years whether to buy into the original contract for a number of years, watched the price per point climb while the life of the contract decreased. I would rather pay now and not have to worry about the decision for the rest of my life.

Just a few more ways to look at the question of extending or not extending at OKW. We just need to remember there is only one correct decision, the one that is correct for each of us based on what we consider important in our lives.

Good luck to all who still need to make the decision.

 

[sjdisneywedding]

Another way to look at the question of extending or not extending is that DVC is offering you the option to extend your contract for $1 per point per year for the extension period. My initial investment was approximately $1.50 per point per year of the original contract. If you purchase a new contract at SSR, not a resale, you will be paying approximately $2.25 per point for a SSR contract that will have less than 50 years of life. Whereas, by excercising the extension option, I will have paid $2.50 per point for a membership that eventually will have brought joy to me and my family for over 60 years. (By the way, I do not include annual dues in my figures.)

I could join others who want to wait to pay for an extension closer to the end of the initial contract, but then I will likely pay a higher rate. Just remember the OKW members who debated for a number of years whether to buy into the original contract for a number of years, watched the price per point climb while the life of the contract decreased. I would rather pay now and not have to worry about the decision for the rest of my life.

I completely agree, I have been talking about that $1 per point situation for quite awhile

everyone is entitled to their opinion and undoubtedly should make their decision based on whats best for them and their family, but for me this has to be about the most shocking discussion I have read since I have joined