Perspective to buyers from a 14 year DVC owner

[Drewski77]

It was getting really difficult to find 100 Oct use year AKV resale. (We have 25 direct AKV for blue card.) We lost two in ROFR over the last two years, and they very rarely pop up.

We liked BLT but AKV was really where we felt home, and we wanted more points there.

Because of life changes over the last year with our parents, we had to move them closer to us to care for them... which meant the $ we built to add on 100 at AKV isn’t entirely available anymore.

We looked at the market and ended up deciding to sell the BLT for cash to get either AKV or SSR since we stay at 1BR and need more points.

We’re currently under contract for 200 SSR @ $104. We’ll probably add 35 direct AKV in the next two years so we’ll have:

- 200 SSR for longer stays and 1brs/2BRs where we bring family.

- 60 AKV for shorter stays in studios.

It’s definitely a sidestep but after owning for a few years we’ve realized we value the bigger rooms sooo much more. Studios start to feel small after you stay in a OKW 2BR!

SSR at $104 is a good buy. Did it come with extra points or not?

Congrats on your purchase!

 

[Bobby2443]

I was happy to see this post because this was my mindset with buying DVC. I now own at Grand Floridian and Beach Club .. I can't see myself paying the regular nightly rate and my family likes having a full kitchen so thats what got me onto DVC in the first place. My kids are still all under 3 years old, it'll be interesting to see what I think about DVC when they're 16 and don't want to go anymore (I hope not but I'm sure this will become a reality at some point).

 

[Nie0214]

SSR at $104 is a good buy. Did it come with extra points or not?

Congrats on your purchase!

Thank you! Let’s hope ROFR passes. It was 0/2020 100/2021 200/2021, so I was happy it wasn’t stripped like all the AKVs seem to be!

 

[Richard Rossi]

The Dow Jones Industrial average has gone from under 9000 to over 33000 since 2008.
$20,800 invested in it then would be worth over $75,000 today.

 

[4luv2cdisney]

The Dow Jones Industrial average has gone from under 9000 to over 33000 since 2008.
$20,800 invested in it then would be worth over $75,000 today.

People post this all the time, but not every extra dollar people make can or will be invested in the stock market. And just because someone buys DVC doesn't mean they aren't also investing money. For us, investments are a separate line item in the budget. If that $20,800 was from the vacation budget, but invested instead, there would have been no vacations.

I do believe in buying in smaller increments as I go, even though larger resale contracts sell for less per point. So, I'm never about to sink 10's of thousands into DVC at once, which I guess is why people constantly compare what you could have invested.

I spent 10K when I was going to spend 5K on one single trip to WDW and if I remember correctly we had just cut a non-Disney trip for about 2K so we had extra in our vacation fund anyway. And I never would have invested the other 3K. If anything, it forced us to scrimp and save in other areas we typically blow money on to pay it off in the 6 month free financing term we used.

Over just a few years, I've saved a lot of vacation $$$ because of that purchase and will only now consider spending more because my vacation fund has an excess. We continue to contribute as usual to our vacation fund, but between the accommodations being covered (our dues are less than $40 / month and come out of the regular household budget now) and using SW points to fly, we only have tix and food to cover for our WDW trips (and our Disney rewards cover a good chunk of that, too.) So, we can use our vacation fund to upgrade our Disney trips or go other places.

Point is, it depends on where the money is coming from. If it is coming from true spending money... luxury "treat yourself" funds.... the stock market returns comparison means absolutely nothing. You would have blown it anyway. IMO, the assumption on a DVC purchase has to be that these are already vacation-type funds and any resale value is a bonus.

 

[Drewski77]

The Dow Jones Industrial average has gone from under 9000 to over 33000 since 2008.
$20,800 invested in it then would be worth over $75,000 today.

It’s certainly not an “either” “or” proposition of investing or spending money on vacations or anything else.

But yes, if you put all your money in the stock market, eat only Top Ramen, rent a 500 square foot house, take no vacations, have no children...you could accumulate much more money.

Of course, many will pass away before spending it, or when you can spend it the enjoyment might be far less.

Basically, the tired stock market comparison is a false dichotomy, or one based on accumulated wealth being the most important thing.

 

[BridgetBordeaux]

It’s certainly not an “either” “or” proposition of investing or spending money on vacations or anything else.

But yes, if you put all your money in the stock market, eat only Top Ramen, rent a 500 square foot house, take no vacations, have no children...you could accumulate much more money.

Of course, many will pass away before spending it, or when you can spend it the enjoyment might be far less.

Basically, the tired stock market comparison is a false dichotomy, or one based on accumulated wealth being the most important thing.

Let me try to reframe the scenario.

The possible benefit of investing the money and skimming off that "source" is that if you choose to skip a year or go 18 months between visits, there is no annual dues expense.

We all know there are periods of time when deluxe rooms are offered at a discount or maybe a moderate meets your needs.

There are also times when the vacation money might serve the family's needs better by going to the beach or traveling to some other destination.

Sometimes a traditional vacation might not happen due to a job change, a move, or a transfer.

Someone can also rent DVC points at a discount and stay at DVC for cash.

I agree that "the point" should not be to accumulate wealth for the sake of just having a stockpile of money.

But there are a variety of ways to strategically use a chunk of money to fund a vacation.

I do acknowledge that it seems that DVC has retained a decent resale value due to ROFR.

I have just mentioned a buffet of factors that may be why somebody might choose an alternative way to visit WDW instead of buying DVC

...............and don't even got me started on the increased cost for those that borrow the money and finance the contract. Ouch!!

 

[Drewski77]

Let me try to reframe the scenario.

The possible benefit of investing the money and skimming off that "source" is that if you choose to skip a year or go 18 months between visits, there is no annual dues expense.

We all know there are periods of time when deluxe rooms are offered at a discount or maybe a moderate meets your needs.

There are also times when the vacation money might serve the family's needs better by going to the beach or traveling to some other destination.

Sometimes a traditional vacation might not happen due to a job change, a move, or a transfer.

Someone can also rent DVC points at a discount and stay at DVC for cash.

I agree that "the point" should not be to accumulate wealth for the sake of just having a stockpile of money.

But there are a variety of ways to strategically use a chunk of money to fund a vacation.

I do acknowledge that it seems that DVC has retained a decent resale value due to ROFR.

I have just mentioned a buffet of factors that may be why somebody might choose an alternative way to visit WDW instead of buying DVC

...............and don't even got me started on the increased cost for those that borrow the money and finance the contract. Ouch!!

All valid points, but we have to recognize the unique and extended time period we are in of basically a 0% risk free rate of return environment.

In using the investment example the false premise is that everyone is 100% in equities, when the reality is most have 20% or more in bonds/CD’s earning basically nothing after tax.

If one can save $1,500 or $2,000+ a year (even compared to renting points) on a vacation by using idle funds earning almost zero, then this is a far greater after tax return.

A person could then take the vacation savings and put them into his/her investment portfolio.

So yes, I agree that there are many creative ways to take and pay for a vacation.

However, in this zero rate environment, there are also many creative ways to use investment allocations to fund vacations and earn a greater return.

 

[Heather07438]

It’s hard to make true comparisons. $100 back in 2010 had a lot more buying power than it does today, same with $11k+ buying OKW minimum 220pts back in ‘95. Dues, tickets, food, merch, hard tickets, etc is going to be money not spent elsewhere. Would we go to WDW every year or two for 3 decades? Maybe. It’s also possible to pass up a few destination deals because already have plans, our hearts invested and our calendar marked to use those Club points. Disney doesn’t lose money selling DVC. What they get in return is an emotional and financial commitment to buy a very expensive vacation year after year.

The question is can it save you money. Sure but it’s not always comparable to best scenario reports. People doing great with it are probably the most willing to share experience. There’s sure to be people who had a $300 night lodging budget who are now paying $400+ a night Riviera DVC for nicer accommodations and replaced some cheaper overall travel options too. Soon they’re booking 1BRs that cost $600/nt. Disney is king of the upsell. In 20 years they could show how DVC saved them money off rack rates. Maybe they got more for paying a tad more while also committing to spend a huge chunk of their of vacation budget in WDW for years/decades. WDW is awesome. DVC comes with intangible benefits like making that family time, it also comes with intangible costs too.

 

[Nabas]

The question is can it save you money. Sure but it’s not always comparable to best scenario reports. People doing great with it are probably the most willing to share experience. There’s sure to be people who had a $300 night lodging budget who are now paying $400+ a night Riviera DVC for nicer accommodations and replaced some cheaper overall travel options too. Soon they’re booking 1BRs that cost $600/nt. Disney is king of the upsell.

Your post got me thinking about a direct purchase at the Riviera.

The OP bought 200 points at AKV in 2008 and has paid a total of $37,890 to-date. Including 2021, that's 14 years, which equates to an average of $2,706 per year. Divide that by the 200 points and it's $13.53 per point.

In general, renting DVC points is the least expensive way to stay at a Deluxe Resort, and with point rentals running anywhere from $16 to $20 per point at the moment, the OP is ahead of the game.

Now let's look at the Riviera.

If you buy 200 points at the Riviera, Disney is offering a $21/point discount, bringing the purchase price down to $180/point. Let's divide that by the same 14 years, resulting in $12.86/point for the original purchase.

Riviera Maintenance Fee is $8.38/point and is sure to go up each year for the next 14 years.

Adding $12.86 and $8.38 together results in $21.24/point.

Keeping in mind that Maintenance Fees are only going to increase, it seems the best way to come ahead with the Riviera is to sell in at some time in the future, or holding onto it for several decades.

So you can still come out ahead with a Riviera purchase, as long as it holds its value. (Or you hold onto it a very long time.) Since all other DVC resorts have held their value, it seems reasonable to believe that the Riviera will as well.

 

[dvc lover 1970]

Thank you for sharing your perspective and I completely agree! It really kind of breaks even in the long run, but it gives many memories that you would not get otherwise, which is why we love it!

 

[Drewski77]

Thank you for sharing your perspective and I completely agree! It really kind of breaks even in the long run, but it gives many memories that you would not get otherwise, which is why we love it!

Your perspective is spot on:

4 years ago my wife and I took her parents and our nephew (their only grandchild) to Disneyland and stayed in a one bedroom villa with an amazing park view.

My wife’s parents never travel, and only came as we had the DVC points that we recently bought to treat them.

Everyone had such a great time, including my father in law who at first was not excited about Disneyland.

Fast forward and last year my wife’s Dad passed away very unexpectedly at only 67. We simply can’t put a price tag on the memories from our trip together that DVC made possible.

So much in life is about numbers, but the most valuable things are not.

 

[Ssplashhmtn]

Thank you for sharing your perspective and I completely agree! It really kind of breaks even in the long run, but it gives many memories that you would not get otherwise, which is why we love it!

It’s actually a lot better than break even. OP could sell out today and pocket the full original investment in cash. That’s a lot better than break even, as the OP “break even” math assumes the investment is worth zero today.

 

[Heather07438]

Your post got me thinking about a direct purchase at the Riviera.

The OP bought 200 points at AKV in 2008 and has paid a total of $37,890 to-date. Including 2021, that's 14 years, which equates to an average of $2,706 per year. Divide that by the 200 points and it's $13.53 per point.

In general, renting DVC points is the least expensive way to stay at a Deluxe Resort, and with point rentals running anywhere from $16 to $20 per point at the moment, the OP is ahead of the game.

Now let's look at the Riviera.

If you buy 200 points at the Riviera, Disney is offering a $21/point discount, bringing the purchase price down to $180/point. Let's divide that by the same 14 years, resulting in $12.86/point for the original purchase.

Riviera Maintenance Fee is $8.38/point and is sure to go up each year for the next 14 years.

Adding $12.86 and $8.38 together results in $21.24/point.

Keeping in mind that Maintenance Fees are only going to increase, it seems the best way to come ahead with the Riviera is to sell in at some time in the future, or holding onto it for several decades.

So you can still come out ahead with a Riviera purchase, as long as it holds its value. (Or you hold onto it a very long time.) Since all other DVC resorts have held their value, it seems reasonable to believe that the Riviera will as well.

I don’t think Riviera is necessarily a bad value. More specifically it’s that plenty of buyers aren’t really going to see that savings. It goes beyond the cost of just the DVC component. Instead they may increase their vacation spending and become more Disney-centric in their destination choices.

For people who love going, will continue going thru the years, spend that kind of money regardless, and who still left themselves vacation budget beyond WDW... it really can be a savings and a worthwhile commitment.

What’s saved in accommodations is easily spent on expensive everything else. Year after year. Somebody buying 150pts for $30k is just the tip of the iceberg. With dues that’s $2k for the week’s stay. Might spend $6-10k for the whole trip. That’s $60-100k out of the next decade’s vacation budget dedicated to WDW. Some are fine with that commitment. Some don’t realize the long term too.

 

[eleven24]

I was happy to see this post because this was my mindset with buying DVC. I now own at Grand Floridian and Beach Club .. I can't see myself paying the regular nightly rate and my family likes having a full kitchen so thats what got me onto DVC in the first place. My kids are still all under 3 years old, it'll be interesting to see what I think about DVC when they're 16 and don't want to go anymore (I hope not but I'm sure this will become a reality at some point).

I thought the same thing. My 19 year old wants to go now more than he did when he was 7.

 

[MonaMN]

I thought the same thing. My 19 year old wants to go now more than he did when he was 7.

Love it! My 12 year old is a total Disney nerd (can’t get her interested in any pop culture except Disney) and I hope she is the same way.

 

[gisele2]

My kids are more pragmatic, they said : As long as you pay mum , we will go....

 

[AvidDisReader]

When we started with DVC, my wife and I went once a year. We love going so much we bought more points to go 2 times a year. Now (pre pandemic) we were going 3 times a year. 2 trips with 1 Bedroom with one of my kids families and one trip a year at studio just us. So with lodging paid, and buying an annual pass, the third trip cost us plane tickets and food, I always felt that third trip was free (not really but it felt that way). So in that respect, owning more points was allowing to take that third parent only trip.

 

[crisi]

So I visit more boards than this and recently I saw a post from someone else. The topic was retirement. Changing a few details to protect the innocent - this guy was 55 years old and looking to retire. He and his wife were just going to get the last one through college with no debt, but monte carlo simulations showed they could retire as soon as that was done - they were basically just paying tuition out of income at this point. They'll be able to travel with what they have stashed away - and more importantly, won't have to continue to work in order to live - I think he said he will still pick up some work here and there - but the corporate life was going away. Like this board, I've been over there for years, this is not a guy who has been eating ramen and not traveling in order to retire - they've had a comfortable middle class/upper middle class lifestyle that will continue into retirement.

The thing that made me laugh was that he referred to us. His brother in law is apparently his age, and said "I will never be able to retire." He said in his comments, "of course not, he has that expensive Disney timeshare, they go twice a year....." and then some other spending choices his BIL and family were making that would postpone retirement. It was such an obvious view of the other side. I thought "I wonder if BIL is a Disboarder?"

DVC is awesome. For the people it works for. But be aware of what you are giving up - because you are ALWAYS giving up something in order to get something else. And yes, its about balance - I wouldn't recommend anyone eat ramen to be able to die a millionaire. But I also really hope my kids don't need to help support me. And that they get a chance at a start without onerous college debt. As long as you are making your trades with your eyes open and taking responsibility for the results, go ahead.

And be very careful on depending on salvage value to make DVC work. I could sell mine for twice what I paid for it. But I could sell the stock I bought about the same time for three or four times what I paid for it. I haven't gotten vacations out of the stock, but I've gotten dividends. One big terrorist attack at WDW and all our "investments" go up in a poof of smoke. And twenty years of global warming makes very little difference to me - who will be going on 80 by then, but if you are thirty - it might make a big difference in the value of your "investment."

 

[Drewski77]

So I visit more boards than this and recently I saw a post from someone else. The topic was retirement. Changing a few details to protect the innocent - this guy was 55 years old and looking to retire. He and his wife were just going to get the last one through college with no debt, but monte carlo simulations showed they could retire as soon as that was done - they were basically just paying tuition out of income at this point. They'll be able to travel with what they have stashed away - and more importantly, won't have to continue to work in order to live - I think he said he will still pick up some work here and there - but the corporate life was going away. Like this board, I've been over there for years, this is not a guy who has been eating ramen and not traveling in order to retire - they've had a comfortable middle class/upper middle class lifestyle that will continue into retirement.

The thing that made me laugh was that he referred to us. His brother in law is apparently his age, and said "I will never be able to retire." He said in his comments, "of course not, he has that expensive Disney timeshare, they go twice a year....." and then some other spending choices his BIL and family were making that would postpone retirement. It was such an obvious view of the other side. I thought "I wonder if BIL is a Disboarder?"

DVC is awesome. For the people it works for. But be aware of what you are giving up - because you are ALWAYS giving up something in order to get something else. And yes, its about balance - I wouldn't recommend anyone eat ramen to be able to die a millionaire. But I also really hope my kids don't need to help support me. And that they get a chance at a start without onerous college debt. As long as you are making your trades with your eyes open and taking responsibility for the results, go ahead.

And be very careful on depending on salvage value to make DVC work. I could sell mine for twice what I paid for it. But I could sell the stock I bought about the same time for three or four times what I paid for it. I haven't gotten vacations out of the stock, but I've gotten dividends. One big terrorist attack at WDW and all our "investments" go up in a poof of smoke. And twenty years of global warming makes very little difference to me - who will be going on 80 by then, but if you are thirty - it might make a big difference in the value of your "investment."

So the overriding message of your post is don’t overextend yourself and sacrifice your financial future...sound advice but certainly not unique to buying DVC.

Lots of ways someone could overextend themselves and never take a vacation, let alone buy into DVC.

DVC by itself can be a solid tool for vacations, but like anything you can overextend and spend too much.

Not really any different than most other things in life...Top Ramen being an exception.