GCV numbers analysis... am I correct?

[cseca]

OK,
So I've been crunching numbers for the past 2 days and I need to get some opinions if I'm doing this correctly...

Facts:
Cost$ 112 Per point
Life of contract 50 Years
Points purchased 50 points

Cost/point $2.24 ($112*50)/(50*50)
Maint Fee $3.82/point in 2009

Assumptions:
5 nights (2 weekends and 3 weeknights - Fri/Wed or Tue/Sun)

calculation:
Total cost/point (in 2009) = $3.82+2.24 = $6.06

We will be able to vacation:
Every other year (for the first stay)
Adventure season: 99 points => Avg cost/night = $120
Choice season: 109 points => Avg cost/night = $136

Or every 3 years (for the first stay)
Magic season: 149 points => Avg cost/night = $190

Am I correct?
(I understand that MF increases every year, but I figure so does regular hotel cost.)

For a grand cali villas, the numbers don't look too bad.
Unless the MF increases to some extreme #s.

Thanks for your help!

 

[SSRFred]

This is always hotly debated, as it uses fuzzy logic to get to the costs. The way I see it, your per point cost is conservatively at about 1/2 where it should be - which I quickly figured to be at $12.
The assumption you are missing is 'How much would I get if I just put the money into another investment, such as a Detroit Muni Bond?'.

 

[kerickson]

This is always hotly debated, as it uses fuzzy logic to get to the costs. The way I see it, your per point cost is conservatively at about 1/2 where it should be - which I quickly figured to be at $12.
The assumption you are missing is 'How much would I get if I just put the money into another investment, such as a Detroit Muni Bond?'.

If you are comparing against another investment you need to also factor drawing principle out of that investment for a yearly/bi-yearly vacation at rack rates...

 

[nunzia]

This is always hotly debated, as it uses fuzzy logic to get to the costs. The way I see it, your per point cost is conservatively at about 1/2 where it should be - which I quickly figured to be at $12.
The assumption you are missing is 'How much would I get if I just put the money into another investment, such as a Detroit Muni Bond?'.

... or..how much would I have lost if I put the money in MGM stock?

 

[jbuckent]

I've been crunching numbers as well and have a couple questions on your math.

First is the 50 years just a number you threw out there thinking you will be able to enjoy it for another 50 years or is it an actual contract that is over with in 50 years?

Second question how can you buy only 50 points? I thought the minimum was 160. If we can buy less than that it might make sense for us to buy. We typically stay in moderate resorts and would likely pick a studio when staying with DVC which is less than 160 points, it doesn't make sense to us to buy more points than we would use in 1 year.

 

[Sandisw]

This is always hotly debated, as it uses fuzzy logic to get to the costs. The way I see it, your per point cost is conservatively at about 1/2 where it should be - which I quickly figured to be at $12.
The assumption you are missing is 'How much would I get if I just put the money into another investment, such as a Detroit Muni Bond?'.

However, one only has to consider lost investment dollars IF the money would be used that way if it isn't spent on DVC.

Personally, the money that I am using for DVC comes from my yearly vacation budget. This money is spent every year so even if it wasn't spent on DVC, it would have been spent at WDW or the beach, not saved. In my situation, I have other money that is used for investments.

 

[kerickson]

I've been crunching numbers as well and have a couple questions on your math.

First is the 50 years just a number you threw out there thinking you will be able to enjoy it for another 50 years or is it an actual contract that is over with in 50 years?

Second question how can you buy only 50 points? I thought the minimum was 160. If we can buy less than that it might make sense for us to buy. We typically stay in moderate resorts and would likely pick a studio when staying with DVC which is less than 160 points, it doesn't make sense to us to buy more points than we would use in 1 year.

only existing members adding on can buy 50 pts at VGC (25 is the lowest actually) New members must buy 160. Eventually you'll be able to buy 50pt contracts via resale...

 

[cseca]

I've been crunching numbers as well and have a couple questions on your math.

First is the 50 years just a number you threw out there thinking you will be able to enjoy it for another 50 years or is it an actual contract that is over with in 50 years?

Second question how can you buy only 50 points? I thought the minimum was 160. If we can buy less than that it might make sense for us to buy. We typically stay in moderate resorts and would likely pick a studio when staying with DVC which is less than 160 points, it doesn't make sense to us to buy more points than we would use in 1 year.

I think somebody posted that the contract for GCV expires on Jan 2060, hence the 50 years (I have Dec use year, so it'll be 50 years for me).

And kerickson already answered your question on the 50 vs. 160pts. I am a current member so luckily I can buy as low as 25pts.

Good luck on your number crunching!

 

[billyung]

This is always hotly debated, as it uses fuzzy logic to get to the costs. The way I see it, your per point cost is conservatively at about 1/2 where it should be - which I quickly figured to be at $12.
The assumption you are missing is 'How much would I get if I just put the money into another investment, such as a Detroit Muni Bond?'.

I know this is old but I can't resist. To answer your question, the amount you would receive is zero. Better to blow it on a vacation.

 

[nunzia]

I know this is old but I can't resist. To answer your question, the amount you would receive is zero. Better to blow it on a vacation.

 

[kerickson]

I know this is old but I can't resist. To answer your question, the amount you would receive is zero. Better to blow it on a vacation.

Lol