DVC and the current market

[RWishbone]

Last night I stumbled upon some old threads from people who argued that buying into the DVC was not a wise investment since they could take their money, invest it in the market, make anywhere from 8% to 15% ( their words, not mine) and use that money to rent a deluxe room each year. I never tried to justify the DVC buy as an investment - I just do it because I love to vacation each year at WDW - but those old posts make me feel even better about my decision. I certainly have not seen any similiar arguments in the past 10 months.

 

[shelly3girls]

We bought in April just with the plan of economizing future visits, not as an investment. At the time my DH jokingly said we should by a second contract as an investment being better than the market. Of course we didn't, but oh boy am I glad we decided to take the plunge in April. The past couple months have been ugly.

 

[Maistre Gracey]

At first I always thought of the lost investment income, and did not think DVC was a good financial decision.

I have done an about face, not because of the market, but because of what someone pointed out to me. They said "if you don't buy DVC, are you going to invest the money, or blow it on something else?"

Well, at the time, I had just put a big ole downpayment on another sportscar (but still had plenty to finance). Now, there isn't much worse of an investment than a car that you plan to keep for two years, so that answered my question.

Do NOT figure lost interest income when figuring the cost of DVC!

 

[chris1gill]

I have to agree, I don't think it is logical to assume you would use that money for investments that would actually yield the much heralded 10-20% per year....

We would not have invested the money for very long, as we were always paying cash to spend 7 nights in a 1 bedroom villa w/AP discount... I figure our first contract paid for itself in 4 years, but in this 4 years, we stayed an average of 10-12 nights... This is our quick & dirty calculation...

 

[Kick it up a notch!]

Somebody is losing money in the markets??? You mean you're not making 8-15%???

 

[troosvelt]

Funny you should mention the debate on the value of DVC because I wrote one for Mouseplanet. I just finished updating it and it should be up soon.

Bottom line is even if you figure a *reasonable* earning on the DVC money (like 10%) it's still at best an even match between cost of DVC vs cost of paying for a moderate level resort.

Which is why I'll be buying in the next six months or so.

 

[PamOKW]

Maistre Gracey -- It's funny you use the car example. That's the way I always think of DVC as well. You can buy a Cooper Mini (All-Star) or a sports car (DVC) and they both get you transportation/a vacation. But, you buy the car that you like and can afford, i.e., the sports car. Maintenance and tax costs are like the gas and insurance on the car.

RWishbone -- I've been thinking the same thing about those who talked about our lost interest. Worrying about losing 20% per year on the investment seems to be slightly inflated now.

 

[natcam1996]

I figured the best investment I can make is in the look on my daughter's face every time we arrive at WDW and the excitement we all feel anticipating the trip back. That's why I bought into DVC - becuase it just makes it easier and more natural. It's hard to put a value on those. Besides, like all of you, I've blown bucks on more frivolous things.

 

[yasuern]

Like Natcam1996 - we bought into DVC simply for the joy it brings to our dgt and us each time we are at WDW - I have never thought of DVC as an investment in anyway - its our vacations - and most people spend money on vacation not make money.

 

[WDWalways]

As you can see from my signature line I travel to WDW quite often and I have definitely spent more in the past 10 years on WDW resort stays plus offsites than I would have spent on purchasing DVC membership when it first was offered and getting 50 years worth of stays at much nicer accomadations -- that is the value of DVC!! As usual, I say, why didn't I buy sooner!

 

[MikeJ]

I smile when I read people who say they "never thought of DVC as an investment". I take the opposite approach. I think DVC has been a great investment for our family, even though we've only owned at OKW for two years. I guess it's just a commentary on society today that when people hear the word investment they automatically think financial investment.

- Mike

 

[shelly3girls]

Nicely said. Every trip for us is an investment into my mental health and my family!

 

[Maistre Gracey]

Originally posted by MikeJ
I smile when I read people who say they "never thought of DVC as an investment". I take the opposite approach. I think DVC has been a great investment for our family, even though we've only owned at OKW for two years. I guess it's just a commentary on society today that when people hear the word investment they automatically think financial investment.

- Mike

Very Well Said...

 

[anniet]

I just bought DVC this past March and when I got home and was still within the 2 week time frame that would allow me to cancel the contract (which by the way I can't believe they offer, but...) I immediately took everything over to my Brother-in-law to have him look at everything since he has a masters in finance and works for some big financial firm in Boston.

While going through everything I mentioned to him that I read the arguments on Mouseplanet comparing the purchase of DVC to an investment in the stockmarket and when I told him about those arguments he just shook his head. He said DVC should never be thought of as a financial investment, but as a prepurchase of future vacations that will reap savings on accomodations of approximately 50-60% within 5 to 7 years.

In the past I have saved money by staying off property, but DVC will definitely upgrade the quality of the accomodations that I will stay in, at a discounted price. The other piece was that the offsite property that I have stayed in in the past is getting older now and lets face it, nobody keeps their property up like Disney (okay with the help of our annual maintenance fees)

I however, feel the exact same way as WDWAlways. Why o why didn't I buy it sooner?