DVC vs Mutual Fund

[LilGMom]

"Because I had the foresight to forego certain things in life until I could afford them. Financing stuff....... nope, not going to do that. In this world of spend now screw tomorrow I chose to do the reverse. I saved 70 - 80% of what I was making for the last 20 years and that includes what I made as a kid working. I had $30,000 saved when I graduated high school. I lived in a modest 2000 sq. feet house while I was makiing $200,000 a year. Friends used to ask me why I was driving a Toyota and living in a starter home. I told them, you'll see why. Well now they see how I'm doing at age 35 and they know."

So let me get this right.... You are 35 and have been saving for 20 years so that means you started saving at the age of 15. And you had $30,000 saved when you graduated high school... What exactly did you do, or sell, to save $30,000 in 2-3 years? I'm just being nosey.

 

[jade1]

I'm kinda thinking if you have $20,000 laying around you may not be stretched too thin.

 

[crisi]

I'm kinda thinking if you have $20,000 laying around you may not be stretched too thin.

Really? My uncle claims his expenses are $15,000 a month, so he can't "afford" to help his mother - my grandmother. You can be quite stretched with $20,000 sitting in the bank.

 

[Mtnman44]

I'd love to keep reading this thread, but my helicopter is leaving for my yacht now. I owe all my extra money to my shrewd use of frequent flyer miles and coupons. For the last 15 years, all of my meals have consisted of Costco food samples. You may laugh, but look at me now. It pays to plan ahead. That's why I'm buying DVC!!!

 

[jade1]

Really? My uncle claims his expenses are $15,000 a month, so he can't "afford" to help his mother - my grandmother. You can be quite stretched with $20,000 sitting in the bank.

I suggest he contact dumbo71 for advice.

 

[castleri]

ETA: I don't think the quote thing is working. I didn't quote myself and I've seen Casterli quoted when they were my quotes????????


I'll bow out of this otherwise interesting topic.

Thanks for pointing out the quote thing- I prefer not to be credited with someone else's views also.

 

[dumbo71]

So let me get this right.... You are 35 and have been saving for 20 years so that means you started saving at the age of 15. And you had $30,000 saved when you graduated high school... What exactly did you do, or sell, to save $30,000 in 2-3 years? I'm just being nosey.

Actually I started at 14 working in the restaurant business. Started washing dishes 5 nights a week and worked my way up the ladder to cooking, busing tables, etc.

It wasn't that hard to save the money. I still spent money but I had no bills to pay, I lived at home. That is only about 7500 per year savings.

I'm out of the deabte but wanted to answer that. Also Dumbo71 will gladly give financial advice.... for a small fee.

 

[JimMIA]

My point is being lost in my rant.

Sorry. I tried to resist...I really did! But some lines are just TOO easy!

 

[tor]

ETA: I don't think the quote thing is working. I didn't quote myself and I've seen Casterli quoted when they were my quotes????????

It is giving double quotes for some reason all you need to do to correct it is erase the second [QUO**E=name;number] and it will credit the correct poster. Until they fix this issue.

 

[RobDoc]

This has drifted far from the topic. Please confine comments to the topic.

 

[BroganMc]

Anyone actually do the math? Anyone have a strategy?

You'll never make the same return on the investment in MF vs. timeshare. Mutual Funds should continue to grow at a sustained rate. Of course we could also see a major market crash and you start losing drastically. A timeshare will give you guaranteed lodgings for X number of years, but yu may not be able to afford maintenance fees and travel expenses.

DVC remains one of the only timeshares I know of that does actually retain a good portion of its principle on the resale market. (My Marriott weeks are lucky to be worth half what we paid for them 3 years ago.) But it's still an expense account rather than savings.

My strategy is to save X amount of my income per year, live on Y amount and whatever is leftover I invest in quality of life things like vacations, computers, expendables.

Only thing I have done differently in recent years has been to pay a little more attenton to my vacation goals. My mom was diagnosed with cancer with the new millenium and that got my entire family to stop putting things off for tomorrow. It meant investing in timeshares and arranging a lot of family vacations as well as wild adventures. Unfortunately my mom only got to enjoy 4 years of it before we lost her, but those are the things we remember and cherish most.

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 you're asking will the price continue to rise on points, I think yes. At least as long as Disney enforces the ROFR and keeps resale prices competitive.

Now the one advantage AKV has over BCV and VWL (as well as BWV, OKW, HH, & VB) is time. AKV has a good 15 years more life to its contract. That may translate to mean AKV resales are more valuable than the others in 10 years time. And if we ever see a CRV or monorail resort, VWL may lose it's quality location value. I'm not really sure why BCV is so popular right now except for SAB. But if AKV's new waterpark/themed pool turns out as cool as the planners say, it might lose a peg or too. Who knows.

Either way, I doubt people bought into OKW in '91-'93 expecting to see a return on their investment or even a break even. It was merely a vehicle for enjoying WDW vacations with better accommodations and at a fixed future pay rate.

 

[JimC]

I think the question to ask is which is the best strategy to get the vacations I want.

Options:
1. Buy DVC and pay dues to get points to use for my vacations.
2. Put same cash flows into money market and use that account (and the income it generates) to rent points or hotel rooms for my vacations.

The answer involves many subjective value considerations and some financial assumptions. But it does provide you with a framework to make a more informed decision about what is right for your situation.

Send me a PM with your email and I will send you the spreadsheet if you are interested in doing the financial analysis for yourself. The spreadsheet is set up DVC specific. That is it models our DVC market place. If you want to use it for other timeshares you will need to modify it to fit the program you are investigating.

 

[WDWorld2003]

We purchased DVC partially with a home equity loan thinking we could pay it off in a few months or in less than two years. Circumstances changed and we had a drastic drop in income and are just coming up for air. Would we do it again.... probably not. I'm glad we own but I wish we had put that money in a mutual fund and purchased later with cash.

Both my DH and I are in jobs where are income can flucuate drastically from one month to the next so it is very difficult to budget. We do have a savings but life can be hard sometimes and you never know when things can change financially.

The people on this board are correct that advise to pay cash. We love owning and it is one of the best things we have done but we were counting our chickens before they hatched.

I do think we purchased the right timeshare for us and we are very happy that we have been able to rent points to pay for all of our maintenance fees plus since we have owned and still take a vacation at WDW. It has given us the ability to take some nice vacations in these lean years. But the mutual fund would have also given us income to take the vacations.

We'll be back on track soon and are happy we own. We did analyze the purchase to death but we didn't analyze our financial future like we should have.

 

[DVC Grammy]

I have both............mutual funds and DVC.
The returns on my mutual funds........sometimes positive, sometimes negative.
The "returns" on my DVC............PRICELESS!

 

[tubtruck]

When did recreation and quality time with loved ones become an investment opportunity?

 

[RobDoc]

Apparently, several felt it important to continue making off-topic contributions to this thread - even after being warned. Those posts have been removed.

It would appear that the actual discussion is of little interest any longer, so the thread has been closed.