DVC vs Mutual Fund

[Knotty]

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.


OP, go with the mutual fund.

I agree 100%.

When I read comments where people ask what the intrest rate will be, or wonder if the loan will be approved, I cringe.

 

[fishermouse]

dumbo71;16974783]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.
Thats's why we have insurance, investments and paychecks, if you notice most replies state that DVC is what amounts to expendable funds. Very few are here to invest.

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.
DW and I travel extensivly and those memories mean more to me then all my stocks, 401k, IRA, and bank accounts combined. When one of us is sitting alone someday money in the bank (of which I will have enough to not burden society) won't mean much

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.
You know this for a fact, you are either a very well informed person, or have a crystal ball. Don't see how you can know what any of us can afford.
If you can't pay cash comfortably then the money likely could be used elsewhere.
Cash is not always the best option sometimes a loan with interest works out better when investment and tax benefits are considered.
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.
DVC happens to be the vacation of choice for most of us on DIS boards, the point is most people enjoy the time away at a resort be it WDW or somewhere else. The fact that payments can be stretched out over a length of time does help many to afford this type of upscale resort as opposed to an economy hotel.

Please people, there is more to this world than a trip to see the greedy mouse.
So why exactly are you a DVC member?
OP, go with the mutual fund If this is an investment then deffinatly go with the mutual fund! If you can afford it and want many happy memories go with DVC.
IMHO!!

 

[crisi]

20k to 55 k over ten years is a 10.6% return. Not unreasonable. However, that's about 200 points, or about 2 weeks (14 days) at Disney, so we'd have to remove about $2000 (room rate over 14 days - dues of about a $1000) from that investment, plus the lack of any AP discounts you might have gotten. So you need to sort of treat it like a variable annuity with fluctuating cash flows.

But you'll get very different answers depending on what numbers you use. What is the assumption on room inflation year over year? Return on investment? Dues?

And most critical are the subjective factors - will you continue to vacation the same way with DVC? If you paid cash would you go less often? Stay offsite?

We'd all be richer if we took our vacation dollars and invested them instead of going on vacation. The question with a pre-paid plan is "do you get the quality out for the dollars in." Several accountants around here have made the numbers work.

 

[crisi]

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.

I'll agree with you. There is something offensive about the thought that my childhood was somehow lacking because we never took a "real" vacation (one WDW trip when I was a Senior in high school - otherwise we visited relatives).

And right now my sister is having a lump biopsied. She has two children in diapers and a husband who is older, morbidly obese, and has a family history of heart disease. I hope she is fine - for many, many, many reasons - but one is that her husband is a spender (and she's been an enabler) - they have no money saved. If she dies, our chances of raising two additional kids sometime in the next ten years are pretty high. We are pretty fortunate - our kids have college funds and our retirement is coming along nicely. But two extra college educations suddenly look like they could be part of our future. Don't make your financial irresponsibility someone else's problem. Realize that is the flip side of losing a loved one. Should this come to pass (please, please, don't), of course I will take her kids and treat them as my own - but that means my kids and my own retirement will suffer because they "lived life to the fullest."

 

[JimMIA]

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?

This is a fool's game.

DVC is an expense -- not a small expense, and as others have noted, not a one-time expense because you pay significant dues every year in addition to the initial outlay. In return for that expenditure, you get outstanding vacation lodging. Period.

Anyone who tries to justify DVC as an investment a) doesn't know a thing about investments, and b) doesn't know much about DVC either.

 

[jodifla]

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.

Have to disagree on this one. We financed DVC (the horror!) over five years. Paid if off years ago. We could sell it now for more than we bought it for.

But more importantly, it does allow us to have better vacations than we woudl without it. I just wouldn't plop down 400 buck for a two bedroom place a night, probably no matter how much money I had. We're a single income family now, so being able to use the points instead of thousands of dollars is fantastic.

We love to vacation with family and friends, so this works out perfectly for us.

DVC was an investment for us....in enjoyable vacations. And we've certainly gotten that.

Oh, and we have 401 Ks, prepaid college tuition, money markets, savings accounts, etc etc.

 

[JimMIA]

I can't say this enough but the vast majority of DVC owners have no business owning.

I think most DIS DVC posters have enough common sense to evaluate for themselves whether or not they "...have business owning." I personally don't know the "vast majority of DVC owners," and therefore have no idea whether they should own DVC. If I said I did know, I'd look pretty silly.

If you can't pay cash comfortably then the money likely could be used elsewhere.

Actually, the standard MBA answer to this burning (for some) question is, "It depends." There are many situations where financing might be in one's best interests, and there are many other situations where a person would be brain-dead stupid to borrow. I have no way of knowing whether financing fits in with another family's financial plans or not.

I do agree that a "vacation ownership" program like DVC should certainly take a back seat to serious and thoughful family financial planning, but statements like the above weaken -- not strengthen -- your arguments.

 

[castleri]

dumbo71;16974783] Please people, there is more to this world than a trip to see the greedy mouse.
So why exactly are you a DVC member? Quote]

You beat me to the question I have been wanting to ask-

 

[DVCconvert]

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.

what a downer dude.

 

[Mickmse2002]

I always enjoy these threads that degenerate into purely subjective value statements that some people resort to while passing moral judgements on others that they know absolutely nothing about. It's too easy and glib to say things like "if you can't pay cash you shouldn't go". Not good form.

 

[Boston5602]

mutual fund = always wondering if I chose the right fund , how much of a load is there and all the other fee's . What kind of taxes will I have to pay .... OHHHHH THE STRESS!!!!


DVC = Fun and Family memories . Relaxation and enjoyment. Time rejuvenating to go back to work fresh and ready to make more money !!!!

 

[jcf]

I had no idea

 

[JWG]

WOW
This is better than the presidential debates.

Seriously, on the mutual fund argument, the only way to make that fair comparison is if you deposit the amount and then take whatever comparable vacation you would normally take using DVC points each year, but instead take money from the fund or offset what you take form the fund by what you would pay in MFs.

For example, you could make an upfront investment of $20k into the fund. Then every January you could deposit $1,000 - $1,200 or more into it as the comparable MF's for DVC. You'd have to increase your annual deposit by about 3-5% each year. Then, when you take your vacation each year, use those funds to draw from.

The question is, would that fund last you until 2042, 2054, 2057, etc?
I don't pretend to know the answer.

 

[Slakk]

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?

You will have 55K - I will have million dollar memories

 

[JimMIA]

Sorry I asked

I had no idea

You're fine. It's been great sport!

 

[NemoMOm]

HI,

Op if you are really trying to make a decision, I'll tell you how we came to ours. We don't consider DVC as an investment but an expense. We go to WDW at least once a year before DVC and before baby! Now, with children we knew we would want to continue this tradition as we are HUGE fans. (ergo the visits to these boards)

That being said we still vacation elsewhere, we have funds and we have 529 plan for DS. (I don't why people assume that if have DVC you can't afford anything else )

You do what is right for you and don't let anyone else tell you it is wrong. Afterall it is your money.I hope this helps as alot of people on this Dis have been great to us.

 

[Luigi's Girl]

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.

Looks like someone forgot to take their "Magic Elixir"!

 

[corpcomp]

To your point, the money I made in mutual funds from 1996 to 2005 allowed me to skim off some profit and buy DVC. Now I have both.

Yes I could have made more by keeping it in the funds but enjoying life and Disney vacations are more important to me than $$.

And after just one vacation at BCV, I cannot imagine staying in the standard resort /hotel room again.

Come on CRV!

 

[corpcomp]

Mutual fund invester......


DVC invester.....

Sums it up perfectly

 

[senecabeach]

Originally Posted by jcf
Sorry I asked

I had no idea

Its OK don't be sorry. We've all been through this balancing act in one form or another.