DVC vs Mutual Fund

[jcf]

Anyone actually do the math? Anyone have a strategy?

20k into DVC resort and in 10 years = ?

20k into an index fund and in 10 years = 55k
(based upon returns: 1996-2006)

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

 

[offtheice]

Anyone actually do the math? Anyone have a strategy?

20k into DVC resort and in 10 years = ?

20k into an index fund and in 10 years = 55k
(based upon returns: 1996-2006)

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

No. I plan on spending my next 50 yrs of vacations at one of the greatest places to every visit .

 

[tomandrobin]

Anyone actually do the math? Anyone have a strategy?

20k into DVC resort and in 10 years = ?

20k into an index fund and in 10 years = 55k
(based upon returns: 1996-2006)

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

One is a vehicle for financial investment.

One is a luxury to be used as an investment in vacations.

 

[Granny]

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

I would not plan on breaking even with DVC after any period of time. As noted, DVC is more like a prepaid expense than an investment.

Have there been people who purchased DVC and then sold at a higher price? Yes there have. But in its first 15 years DVC has been in a rapid expansion mode. Who knows what the next 15 years will bring?

 

[erikthewise]

Will you be paying annual dues on your mutual fund?

Unless you pick a real dog of a mutual fund, or the market collapses totally, the mutual fund will provide better returns over ten years.

Yes the price of AKV or whatever will be higher in 10 years, but taking annual dues into account it will probably come out about even. A mutual fund investment will roughly double in 10 years if it averages 7% annual return.

Unless you pick a mutual fund with truly innovative features, the DVC points will be more fun along the way.

Your choice.

 

[crisi]

Will you be paying annual dues on your mutual fund?

Unless you pick a real dog of a mutual fund, or the market collapses totally, the mutual fund will provide better returns over ten years.

Unless you pick a mutual fund with truly innovative features, the DVC points will be more fun along the way.

Your choice.

Depends on your assumptions. If you put the money into a mutual fund, then remove what you'd need to book a Deluxe resort on cash every year, you may do better with DVC than with the mutual fund - but it depends a lot on what the market does, what room rates do, and what sort of room you book in Orlando.

 

[senecabeach]

Anyone actually do the math? Anyone have a strategy?

20k into DVC resort and in 10 years = ?

20k into an index fund and in 10 years = 55k
(based upon returns: 1996-2006)

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

WOW....

My Strategy.......

There's certainly more to living than the almighty $$..should you ever loose a loved one..you'll realize that.

Live Life ...enjoy your DVC and make "Magical Memories" with your family....while you can!!

 

[Disney MAINEiac]

If anyone is looking at DVC as an investment expecting a monitary return i would advise against it. It is a hedge against rising vacation prices and an investment in your leisure time only. i went in with eyes wide open and never intend to make a dime off this DVC. i realize it is costing me money. just not as much as if i paid cash for rooms over time for trips i already fully intended to take. don't try to compare apples to oranges

 

[holcomb-mania]

Apples and oranges. Not even a remotely comparable analysis.

 

[DisneyHumbug]

If you die in 10 years you will have had 10 years of fun, family memories at WDW....or someone else will inherit your mutual fund.

 

[3DisneyKids]

DVC should not be compared to or looked at as an investment. Some may have made some profit (by purchasing in the early years and then selling after it took off), but otherwise, DVC is best as a way to have more upscale/larger accommodations for your Disney trips.

 

[fishermouse]

Anyone actually do the math? Anyone have a strategy?

20k into DVC resort and in 10 years = ?

20k into an index fund and in 10 years = 55k
(based upon returns: 1996-2006)

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

Here we go again
DVC = Recreation = expendable cash......Mutual Fund = Investment and should be compared to stocks , bonds etc. not your "entertainment funds".
Should I spend $200.00 on football tickets or buy a savings bond? How about that trip to Atlantic City or Vegas guess I should compare that to a CD.
If your spending money that you should be investing in your retirement maybe you should check your finacial situation and rethink making a large recreational purchase.
For me DVC is money spent, just like buying a boat or RV. only difference between DVC and renting a condo at the shore is I'm paying up front and have a locked in rate for the next 50 years.

 

[Mule2007]

Anyone actually do the math? Anyone have a strategy?

20k into DVC resort and in 10 years = ?

20k into an index fund and in 10 years = 55k
(based upon returns: 1996-2006)

Anyone think buying into AKV at $91 and selling in 10 years that you will at least breakeven? What about buying into BCV or VWL at $95?

If monetary return is your goal -- stay with the Mutual Fund.

Following your logic are you going to forego entertainment (movies, restaurants, vacations, casinos, etc. over the next 10 years) and put those funds into the Mutual Fund?

Mule

 

[drusba]

If you are looking for return on investment, you should look for something other than DVC. In fact, if you are just looking for a timeshare near Disney and don't care whether you actually stay on site, you should also look elsewhere because off-site timeshares are significantly cheaper both in up-front price and annual dues. As to whether you will at least "break even" by selling later for something close to what you paid, which is not actually breaking even and which I am guessing the majority do not even consider because they don't intend to sell, the answer is that it depends. Right now, anyone who bought ten years ago at OKW or BWV (the two on-sight resorts at that time), could resell for a amount that is about $20 per point more than they paid. However, I would not expect those resorts to be selling at such a like increase in price ten years from now, simply because the closer you get to the end date, 2042, for those resorts, the harder it is going to be for the sale price to keep going up. AKV, with its later end date, will more likely be selling at a premium in 10 years, assuming Disney remains a place of high interest among tourists.

 

[jodifla]

Until my mutual fund lets me check in for a week of vacation for the next 40 years at at 2-bedroom unit with a Jacuzzi tub, destination pool, minutes from WDW, I'm sticking with DVC!

 

[disneybass]

I would say both would be a smart move

 

[Mtnman44]

Yes, this is exactly right. You can't compare these against each other because they are totally separate. With DVC you are going on vacation each year, a cost. With the mutual fund scenario, you have simply made a capital investment. There is no vacation cost calculated so those will be a boring ten years but you will have money at the end. The same is true about any optional expendature or boat or car, vacation, or whatever. You give up the opportunity to earn investment income by using the money now for something you want.

Depends on your assumptions. If you put the money into a mutual fund, then remove what you'd need to book a Deluxe resort on cash every year, you may do better with DVC than with the mutual fund - but it depends a lot on what the market does, what room rates do, and what sort of room you book in Orlando.

 

[Knotty]

By the way, 10K investment to 55k in ten years? Better check your math on that. I think that is over 20% year after year.

Better check the O.P.'s comment. They stated 20k.

After taxes and adjusted for inflation that 20k in 10 years will have the buying power of aprox 40k today, if the indexed fund performs as expected.

One option to consider is to invest the 20k, pull 10% a year from it, add the 1200 you saved in dues/taxes, and take the $3200.00 and use that to pay for lodging at WDW.

That way you will still always have the 20k.

Obvioulsy some years you will have less then 20k (bad year in the markets) and some years you will have more then 20k(good year in the mkts).

Using this method will also give you many more options of where to spend your vacation time.

 

[jade1]

Mutual fund invester......


DVC invester.....

 

[dumbo71]

WOW....

My Strategy.......

There's certainly more to living than the almighty $$..should you ever loose a loved one..you'll realize that.

Live Life ...enjoy your DVC and make "Magical Memories" with your family....while you can!!

You know what this makes sense on the surface but something about that statement still doesn't ring true.

DVC is not a right of passage or some sort of magic elixir. You DON"T need DVC to be happy. Losing a loved one? Sorry but that WDW vacation isn't going to bring them back or make me feel any better about it. Waht would make me feel better is knowing I could help that family finacially maybe by paying the funeral costs or helping one of their kids pay for college.

All the memories in the world won't erase the huge burden of college debt for those that choose to allocate that money for this pre-paid vacation plan. Those memories won't help when the person can't afford medications after they retire.

I can't say this enough but the vast majority of DVC owners have no business owning. They can yell, rant, flame me, whatever they want it is true. If you can't pay cash comfortably then the money likely could be used elsewhere.

The part of your post that really gets me is the assumption that without DVC there is no memories or vacations. Those saying things like, "We could have never afforded this without DVC is way to much." Again if that statement is true they should be running to Tom at TSS and selling immediately.

Please people, there is more to this world than a trip to see the greedy mouse.

OP, go with the mutual fund.