Help! Resale vs SSR

[LIFERBABE]

Using your analogy why buy at all Carlos? Invest your money that you may be using for next years vacation.

My point exactly! If you are that concerned about your money working for you in the market, why buy DVC at all? Why vacation at all? Just put your money in the market. Since when is DVCI a good "investment" and DVCII a bad "investment" because you get a longer contract?

That is totally inconsistent. Any DVC purchase is money NOW for something you won't use for 15 to 20 to 25 to 38 to 50 years.

DVC is a luxury purchase you purchase for you and your family. No finance guru is going to advise you to drop $20-30K on DVC whether it be resale or thru Disney. It is a personal choice.

If you are going to purchase DVC, why spend thousands on it and then have your decision guided by worrying about investing $192 a year?

 

[Mike]

Originally posted by LIFERBABE
If you are going to purchase DVC, why spend thousands on it and then have your decision guided by worrying about investing $192 a year?

The question is whether or not to invest an ADDITIONAL $2300 now for an ADDITIONAL 12 years at the end of the contract. You guys are over-simplifying this analysis. This is a valid question which requires one to do a Net Present Value analysis based on assumed rates of return in the market, rates of inflation , and rates of increases in WDW resort prices.

Like I said, some people don't care about the numbers and just perceive it as a good value and react accordingly. Others need to crunch numbers to provide this level of comfort. To each his own.

In order to compare apples to apples, you have to compare everything in TODAY'S dollars. You need to bring the cost of what your vacations would bein years 39-50 into today's dollars to do a comparison.

Bottom line - do what you are comfortable with but some of these comments indicate that people are not understanding what the true question is.

 

[DrTomorrow]

Originally posted by LIFERBABE
My point exactly! If you are that concerned about your money working for you in the market, why buy DVC at all? Why vacation at all? Just put your money in the market. Since when is DVCI a good "investment" and DVCII a bad "investment" because you get a longer contract?

That is totally inconsistent. Any DVC purchase is money NOW for something you won't use for 15 to 20 to 25 to 38 to 50 years.

DVC is a luxury purchase you purchase for you and your family. No finance guru is going to advise you to drop $20-30K on DVC whether it be resale or thru Disney. It is a personal choice.

If you are going to purchase DVC, why spend thousands on it and then have your decision guided by worrying about investing $192 a year?

LIFERBABE!

Thanks for putting this in perspective.

Look, I understand the desire to understand the costs and benefits of so large an expenditure, particularly when having to make the Disney vs Resale choice. But LIFERBABE is correct - this is a luxury purchase, meant to guarantee - for decades to come - some of the finest accomodations on WDW property.

If you're running NPV analysis to compare a DVC purchase to putting the $$$ into a good index fund - or the kids' college fund, IMHO you should see a financial advisor, stat! And if you've already decided on DVC, and you're simply trying to figure out SSR or OKW or BWV or any of the others, then yes, it is an emotional decision - I mean, does anyone "run the numbers" to decide if they want to stay at the Polynesian instead of the GF? It's VACATION, folks; a pre-paid, long-term, Disney luxury vacation!

So relax, my friends - Hakuna Matata!

 

[mydogdrew]

Originally posted by Mike
The question is whether or not to invest an ADDITIONAL $2300 now for an ADDITIONAL 12 years at the end of the contract. You guys are over-simplifying this analysis. This is a valid question which requires one to do a Net Present Value analysis based on assumed rates of return in the market, rates of inflation , and rates of increases in WDW resort prices.

Like I said, some people don't care about the numbers and just perceive it as a good value and react accordingly. Others need to crunch numbers to provide this level of comfort. To each his own.

In order to compare apples to apples, you have to compare everything in TODAY'S dollars. You need to bring the cost of what your vacations would bein years 39-50 into today's dollars to do a comparison.

Bottom line - do what you are comfortable with but some of these comments indicate that people are not understanding what the true question is.

Yes, people who don't understand the financial concept tend to over simplify. Sure there are assumptions involved but every major capital investment decision is based on NPR/IRR. It should be part of your decision process. The financial analysis will indicate that the extra years are not worth much today but there are many other factors to consider. Take a look at the BWV contract available right now for $76 with some 2002 points. After paying closing and reimbursing 2004 dues and renting 2002-2004 you will have a net cost of ~ $60 with 2005 points available vs. $85 for SSR. You can save more than implied in this thread with resale but you need to hunt around. I say buy what you like and don't focus so much on extra years.

 

[DrTomorrow]

Originally posted by Mike
The question is whether or not to invest an ADDITIONAL $2300 now for an ADDITIONAL 12 years at the end of the contract. You guys are over-simplifying this analysis. This is a valid question which requires one to do a Net Present Value analysis based on assumed rates of return in the market, rates of inflation , and rates of increases in WDW resort prices.

And I'd politely suggest that you are over-simplifying this issue. There are many other - and IMHO, more significant - factors to consider when making this decision than the NPV of the additional 12 years. Again, this is not an investment - at least, not in the NPV/ROR context in which you place it; it is an expenditure. People need to take into account their age and lifespan, heirs, grandchildren, their own desire to "leave something for the kids/grandkids", as well as which DVC Resort calls to their soul. To me - again, IMHO - these are more significant factors than NPV. To wit: a 50-something couple with no children would probably see little benefit in the extra 12 years of SSR, regardless of the fiscal analysis; a 20-something couple w/2 children could see a significant benefit.

I guess that if someone really has absolutely zero preference between OKW and SSR (which I've yet to see, at least on the DIS boards) then falling back on NPV is a valid tool. And I'd suggest that if the $2300 is a deal-maker or -breaker, then perhaps DVC isn't the right expenditure for someone's current fiscal situation.

Don't get me wrong - I'm a techie type with an MBA, and I've got spreadsheets for everything - but this is (or at least should be) an emotional decision for a luxury purchase.

 

[Mike]

Originally posted by DrTomorrow
LIFERBABE!

Thanks for putting this in perspective.

Look, I understand the desire to understand the costs and benefits of so large an expenditure, particularly when having to make the Disney vs Resale choice. But LIFERBABE is correct - this is a luxury purchase, meant to guarantee - for decades to come - some of the finest accomodations on WDW property.

If you're running NPV analysis to compare a DVC purchase to putting the $$$ into a good index fund - or the kids' college fund, IMHO you should see a financial advisor, stat! And if you've already decided on DVC, and you're simply trying to figure out SSR or OKW or BWV or any of the others, then yes, it is an emotional decision - I mean, does anyone "run the numbers" to decide if they want to stay at the Polynesian instead of the GF? It's VACATION, folks; a pre-paid, long-term, Disney luxury vacation!

So relax, my friends - Hakuna Matata!

First of all - I don't think anyone is comparing DVC to college funds.

Second of all, I think everyone should do SOME due diligence for a purchase like this.

And lastly, yes it is a vacation but, as you state, it is a pre-paid long-term one. If those two qualifiers (pre-paid and long-term)don't make you stop and think about true value and associated risks (ie WDW becoming Comcast World - not quite as appealing)then you you would be classified as a free-spending /risk taking type.

However, others are not. They like to know and understand what they are getting for their money.

Neither is more right than the other. There is only one right answer or approach for THAT individual.

However, when people start taking the $2300 and dividing it by 12 and state that it is costing only $192/yr - that is bad information. So either look at the numbers or don't but don't look at them incorrectly. That is all that I am saying.

Some people have the luxury of saying "ah screw it ... I'm going with the longer contract" - some people don't. To each his own.

That is my RELAXED take on the matter.

 

[Mike]

Originally posted by DrTomorrow
And I'd politely suggest that you are over-simplifying this issue. There are many other - and IMHO, more significant - factors to consider when making this decision than the NPV of the additional 12 years. Again, this is not an investment - at least, not in the NPV/ROR context in which you place it; it is an expenditure. People need to take into account their age and lifespan, heirs, grandchildren, their own desire to "leave something for the kids/grandkids", as well as which DVC Resort calls to their soul. To me - again, IMHO - these are more significant factors than NPV. To wit: a 50-something couple with no children would probably see little benefit in the extra 12 years of SSR, regardless of the fiscal analysis; a 20-something couple w/2 children could see a significant benefit.

I guess that if someone really has absolutely zero preference between OKW and SSR (which I've yet to see, at least on the DIS boards) then falling back on NPV is a valid tool. And I'd suggest that if the $2300 is a deal-maker or -breaker, then perhaps DVC isn't the right expenditure for someone's current fiscal situation.

Don't get me wrong - I'm a techie type with an MBA, and I've got spreadsheets for everything - but this is (or at least should be) an emotional decision for a luxury purchase.

And EVERYTHING else that I said in that post that you cut out of your quote agrees with you. So what is your point? I'm saying it is up to the individual if they want to crunch the numbers or not.

 

[rinkwide]

BUt if you look at that over the course of the 12 years it is only $192 a year...

Boy, I like your numbers a lot better than mine. My spreadsheet keeps kicking out $10,000 per year.

Let's see. We'll take out this pesky NPV, remove maintenence fee increases, oh heck, let's just take out MFs all together. And...

Ah yes, $192 per week. Much better!

Bad Excel spreadsheet! Bad!

 

[LIFERBABE]

Bottom line - do what you are comfortable with but some of these comments indicate that people are not understanding what the true question is.

Just because some people choose not to apply your logic does not mean they don't understand and the OP asked the question so what is the "true" question?

Yes I understand about "running the numbers" and agree that everyone should, but the OP asked about OKW and SSR. I believe those that are applying NPV to those 12 years have conveniently chosen to ignore the other variables of the purchase.
To each his own and for someone with a total lack of financial understanding, we do pretty well.

 

[Mike]

Originally posted by LIFERBABE
Just because some people choose not to apply your logic does not mean they don't understand and the OP asked the question so what is the "true" question?

Yes I understand about "running the numbers" and agree that everyone should, but the OP asked about OKW and SSR. I believe those that are applying NPV to those 12 years have conveniently chosen to ignore the other variables of the purchase.
To each his own and for someone with a total lack of financial understanding, we do pretty well.

Wow - a bit touchy? I never said that you have a total lack of financial understanding. But you did say that it only costs $192/year for the additional 12 years which is completely inaccurate.

 

[Coach Rick]

Originally posted by Mike


However, when people start taking the $2300 and dividing it by 12 and state that it is costing only $192/yr - that is bad information. So either look at the numbers or don't but don't look at them incorrectly. That is all that I am saying.

That bad information was in response to an over simplified comparison of a 38 year contract vs the extra 12 years. If you would go back and take the time to read the whole thread you would be able to figure that out. This thread started with a simple question. I answered Carlos1117 badly with my mathamatics. And they said the debate board was dead. ....LOL....

originally posted by rinkwide

Boy, I like your numbers a lot better than mine. My spreadsheet keeps kicking out $10,000 per year.

Let's see. We'll take out this pesky NPV, remove maintenence fee increases, oh heck, let's just take out MFs all together. And...

Ah yes, $192 per week. Much better!

Compare oranges to oranges rinkwide. The comparison was on the contract price difference. Perhaps by 2043 the MF will be $2000 a month, that would help your $10K per year figure.

Goofy & Grumpy1 are going to run the other way with this bickering going on.

Bottom line G&G1 to answer your question, I didn't have any problem booking at OKW with my VB points, and I haven't read that to be a problem here. I suppose if you want premier season like Christmas it might MIGHT be an issue. Anyone else have experience with booking at a different resort than your home resort at peak times?

 

[SoCalKDG]

I say just buy at the place you want to call home.

 

[lovwdwalot]

Hey liferbabe, what is DVC II ?

 

[First Wave]

I read a response to your question that said you could pay $85/pt at SSR or $78 resale.

Here's the actually situation. DVC currently will allow you to purchase a resale for $72 (they won't exercise ROFR) and you can even get banked points for that amount!! When you take advantage of the $85 "special" from DVC, you have to give up 2004 points.

Another consideration. How did you and your family vacation 25 years ago? Will you be vacationing the same way in 30 years? Or 50 years? If so, you may want to consider SSR. But remember, if you're buying SSR to stay at Beach Club or Boardwalk, you won't be able to do that after 2042.

Just a thought!

 

[DrTomorrow]

Originally posted by Mike
First of all - I don't think anyone is comparing DVC to college funds.

Second of all, I think everyone should do SOME due diligence for a purchase like this.

And lastly, yes it is a vacation but, as you state, it is a pre-paid long-term one. If those two qualifiers (pre-paid and long-term)don't make you stop and think about true value and associated risks (ie WDW becoming Comcast World - not quite as appealing)then you you would be classified as a free-spending /risk taking type.

However, others are not. They like to know and understand what they are getting for their money.

Neither is more right than the other. There is only one right answer or approach for THAT individual.

However, when people start taking the $2300 and dividing it by 12 and state that it is costing only $192/yr - that is bad information. So either look at the numbers or don't but don't look at them incorrectly. That is all that I am saying.

Some people have the luxury of saying "ah screw it ... I'm going with the longer contract" - some people don't. To each his own.

That is my RELAXED take on the matter.

Well, I certainly agree that there are risks that should be addressed; in fact, these risks are - IMHO - much more important than the simple financial issues. Not only the risk of Disney being bought out - or substantially changing - during the contract term, but some of the very interesting (read: scary) possibilties in the POS: changes in the 11/7 month booking periods, restriction to only staying at your home resort, Disney no longer being the Management Company, etc. And these matter to ALL DVC buyers; a lot more than a few grand.

And please, keep in mind that - in a very real, practical, here.and.now sense, it is costing someone $192 a year extra to have the right to use the extra 12 years; that is out of pocket now, not in mythical 2048 dollars. To someone comparing the two options, that $2300 is a real difference today....

But hey, everybody has their own way to value things; I'll stick with Jonathan Swift, "A wise man should have money in his head, but not in his heart. "

 

[tjkraz]

Originally posted by First Wave
I read a response to your question that said you could pay $85/pt at SSR or $78 resale.

Here's the actually situation. DVC currently will allow you to purchase a resale for $72 (they won't exercise ROFR) and you can even get banked points for that amount!!

I won't bother going into too many details, but there are some factual errors in your post.

First, DVC has exercised ROFR on contracts in the $72-73-74 range recently. Assuming $72 is far from a given.

You also need to include closing costs at roughly $450-500 regardless of size of contract. That will add $3+ per point to a 150-pt contract.

And, when purchasing a contract with current year points available, the buyer almost always has to pay the current year dues as well. (If the contract has the seller picking up the dues, it's almost guaranteed to get picked-up in ROFR given the current trends.)

 

[findbyme]

I have recently...in the last 5 days....discovered this board. Went from trying to schedule a convention trip in Feb anywhere in Florida to Buying SSR......YOU KNOW WHY....it's because of you guys....hell, I can't wait to join this debate team. Let's meet at my Boardwalk studio in Feb and toss down some brew(ed coffee)...leave the spreadsheets at home.

I am a mom with two DS's and I work my fingers to the bone. My DH does too. My decision might not make any sense and some here tried to talk me out of it....with good intentions...I ran the numbers too!! When i ran it by the DH....got the typical slack jawed, then eyes rolling, then thumbs up from him and called our GUIDE with my CREDIT CARD NUMBER!!! Totally fiscally irresponsible...

I LOVE AMERICA!!!

 

[Coach Rick]

Originally posted by findbyme


I am a mom with two DS's and I work my fingers to the bone. My DH does too. My decision might not make any sense and some here tried to talk me out of it....with good intentions...I ran the numbers too!! When i ran it by the DH....got the typical slack jawed, then eyes rolling, then thumbs up from him and called our GUIDE with my CREDIT CARD NUMBER!!! Totally fiscally irresponsible...

I LOVE AMERICA!!!

Cool, Welcome Home!! Lifes too short..enjoy the hell out of it.