Poll: How much of your net worth would you spend on DVC?

[WestCoastDVC]

EDIT: to clarify I meant the upfront cost of the contract (not yearly dues) and if you choose/chose to finance but could have bought cash, I’d suggest picking one of the bracket answers.

I hope this question is appropriate but I am curious where people fall on the spectrum. Many of us are buying into DVC for the savings over hotel nights. While Disney has held up well in the resale market (compared to other time shares), it probably shouldn't be viewed as an investment other than into your own enjoyment and peace of mind. And it's hard to predict the next 40+ years.

So how much would you or have you spent as a percentage of your net worth excluding home equity (no need to disclose your wealth just give your point of view).

*Also want to acknowledge we are all free to make our own financial choices so no judgment!

 

[linzjane88]

I guess we are around 9% if you take out the house. Although we did buy about 5 years ago when that number was higher I suppose. We have a fair amount of equity in our house....it looks better when we add that number in

We did do a loan thru Lightstream @ 5.99% for 36 months but paid off about a year early. I want to add on maybe at the end of the year or so and probably will do the same thing but put about half down this time.

 

[WestCoastDVC]

I guess we are around 9% if you take out the house. Although we did buy about 5 years ago when that number was higher I suppose. We have a fair amount of equity in our house....it looks better when we add that number in

We did do a loan thru Lightstream @ 5.99% for 36 months but paid off about a year early. I want to add on maybe at the end of the year or so and probably will do the same thing but put about half down this time.

haha fair point re: home equity. 5.99% rate is not too bad - I have only seen discussions of 10%+ before via Disney or the few companies that seem to accept DVC as collateral.

 

[iflyjetzzz]

I hope this question is appropriate but I am curious where people fall on the spectrum. Many of us are buying into DVC for the savings over hotel nights.

How are you calculating the costs? I don't find that to be the case.

 

[WestCoastDVC]

How are you calculating the costs? I don't find that to be the case.

you don’t see savings vs. hotel rates at the same resort? I’m calculating based on [upfront cost per point] / [years left on contract] + [annual dues per point] and then multiplying that number by the point chart for a specific room. That should lead to significant savings compared to booking the resort directly (even with discounts off rack rates) but it does not take into account time value of money. Some say you “lock in the upfront cost and protect against inflation” (dues still rise every year). Of course had you invested in something like the S&P 500 you’d expect more return than inflation.

But either way I thought it was pretty well established that you do save compared to booking directly at the cost of being locked into a contract and point system. Happy to hear other points of view of course. How would you calculate it?

 

[Yinn]

I hope this question is appropriate but I am curious where people fall on the spectrum. Many of us are buying into DVC for the savings over hotel nights. While Disney has held up well in the resale market (compared to other time shares), it probably shouldn't be viewed as an investment other than into your own enjoyment and peace of mind. And it's hard to predict the next 40+ years.

So how much would you or have you spent as a percentage of your net worth excluding home equity (no need to disclose your wealth just give your point of view).

*Also want to acknowledge we are all free to make our own financial choices so no judgment!

I mean, is this really a poll? It seems more like a typical DVC owner's progression step. We start out at 2%. Then addonitus kicks in and we move to 5%....

In all seriousness, this is a little difficult. Is the question on the initial outlay? Or on an annual expense (dues) perspective? Someone might only want to spend x% per annum, but y% for capital outlay.

The loan option is also a bit funky as you can certainly spend a % of your net worth and take a loan despite having the liquidity. There's financial reasons to do that depending on returns and interest.

 

[iflyjetzzz]

you don’t see savings vs. hotel rates at the same resort? I’m calculating based on [upfront cost per point] / [years left on contract] + [annual dues per point] and then multiplying that number by the point chart for a specific room. That should lead to significant savings compared to booking the resort directly (even with discounts off rack rates) but it does not take into account time value of money. Some say you “lock in the upfront cost and protect against inflation” (dues still rise every year). Of course had you invested in something like the S&P 500 you’d expect more return than inflation.

But either way I thought it was pretty well established that you do save compared to booking directly at the cost of being locked into a contract and point system. Happy to hear other points of view of course. How would you calculate it?

That's the rub. If it weren't for DVC, I wouldn't stay at those properties. So when you said hotel rates, I was comparing it to properties that I'd stay at paying cash.
I've stayed at Hyatt Regency Grand Cypress (it's a nice hotel) several times and it's definitely less expensive. And I could find a ton of cheaper options than that just outside the gates. Last visit, I stayed at the Disney Springs Doubletree which gave us extra magic hours/60 day FP+ due to being an affiliate hotel.
I used a bunch of HHonors points for the Doubletree stay, but their rates are very reasonable.

 

[craigkerstiens]

I mean, is this really a poll? It seems more like a typical DVC owner's progression step. We start out at 2%. Then addonitus kicks in and we move to 5%....

In all seriousness, this is a little difficult. Is the question on the initial outlay? Or on an annual expense (dues) perspective? Someone might only want to spend x% per annum, but y% for capital outlay.

The loan option is also a bit funky as you can certainly spend a % of your net worth and take a loan despite having the liquidity. There's financial reasons to do that depending on returns and interest.

Agreed that the mortgage piece makes this a bit more complicated to answer. Personally I actually aim to pay down my house mortgage as slowly as possible. If I'm able to have my mortgage at 3.5/4% rate, and then have the exact amount of cash to pay off my house but put it in the market and get a 10% return, I'm essentially making 6% money I wouldn't otherwise by paying it off.

 

[WestCoastDVC]

I mean, is this really a poll? It seems more like a typical DVC owner's progression step. We start out at 2%. Then addonitus kicks in and we move to 5%....

In all seriousness, this is a little difficult. Is the question on the initial outlay? Or on an annual expense (dues) perspective? Someone might only want to spend x% per annum, but y% for capital outlay.

The loan option is also a bit funky as you can certainly spend a % of your net worth and take a loan despite having the liquidity. There's financial reasons to do that depending on returns and interest.

agree there are some limitations. I thought of it as initial outlay/ how much you’d be willing to pay upfront.

 

[WestCoastDVC]

Agreed that the mortgage piece makes this a bit more complicated to answer. Personally I actually aim to pay down my house mortgage as slowly as possible. If I'm able to have my mortgage at 3.5/4% rate, and then have the exact amount of cash to pay off my house but put it in the market and get a 10% return, I'm essentially making 6% money I wouldn't otherwise by paying it off.

True true - we are actually in the same boat. But for a purchase like DVC I often take the house out of the equation in my mental model.

 

[lovethesun12]

This was really hard for me to answer because basically I just have a vacation budget, so I put regular cash amounts into a savings account. DVC is coming from that cash...

 

[linzjane88]

This was really hard for me to answer because basically I just have a vacation budget, so I put regular cash amounts into a savings account. DVC is coming from that cash...

I look at it like that too. We are usually 8-12% of our annual income for travel and just run with that.

 

[sethschroeder]

I can't say I ever even thought about a DVC purchase as % of my net worth. I don't view it or treat it like an asset. Now I know I can sell my contracts if times were getting really bad for us though but its more so as a liability since I have annual MFs.

I view it more so in the light that what am I saving long term vs what am I spending. Then add in can I afford to spend that right now in the nearterm in cash flow.

As an example my 401k + retirement accounts would be part of my networth but I don't use that as part of my equation to buy or not. To me that doesn't seem reasonable for someone in the beginning part of their life still. I also think this more relates to your overall budget.

As an example some people pay 5%-10%-20% of their income in property tax. I say that is crazy and chose to live 1-2hrs from the two offices I am at roughly 2 weeks out of the month. By doing so I have a cheaper house, lower mortgage, and drastically lower property tax. I did that exclusively to have latitude to make purchases like DVC if I wanted to.

 

[karen4546]

IF we can't make the purchase in cash my husband will not do it. When we did the tour in 2019, I never expected for my husband to be on board. When our guide left the room he said "why haven't we looked into this sooner?" I had been researching, looking at resale markets, stalking these boards for information etc.

We have a vacation budget that we budget for 10 days at WDW, flights, food etc. We had rented several times in the past and were currently on a rented points. Anyway, we decided to take $4000 of the budget for 4 years and buy 100 points at AKV. Well, come September of 2019- we needed more points for a 2br and so we added on 50 more. So, now we were into DVC for $22,000 direct cash purchase. We took the money out of our savings and we just pay it back from the vacation fund. It will be 5 years now instead of 4 for us to pay it back.

I am always looking a resale contracts. We will not purchase direct again, but we will purchase more points. Our next purchase will probably be with whatever vacation funds have carried over minus what I am using to get a tummy tuck

Our ONLY regret to purchasing DVC was not doing it sooner. I think we will eventually have 150 pts at AKV, 150 at CC, 150 at BCV and maybe 150 at Poly. We have four children at that way we can divvy them up in our will. right now, I have my middle daughter to have the 125 at AKV because she is the biggest Disney lover of all of them.

 

[karen4546]

I look at it like that too. We are usually 8-12% of our annual income for travel and just run with that.

Us too. We budget $10000 a year for the 2 of us or 10 nights at Disney We are just paying ourselves back the hotel portion.

 

[Bobby2443]

While this is real estate I in no way treat this as an investment, to me it’s purely leisure spending for family fun. I view it more as a liability than an asset but I think that’s all relative to how you view your own personal finances

 

[DaveNan]

This response to this I suspect is fairly age based. If I were in my late 20's starting a family and my 401K/IRA was 100 to 200K, on a path to a bigger number as I age, maybe 25% ( 25 to 50K) would be OK. As long I was stall able contribute and manage my long term investments. In my 50's, if my nest egg was 200K, I personally would have a hard time having 50K in DVC. If net worth was closer to 1,000K, than having 5% (50k) would make more sense.

 

[E2ME2]

Interesting idea -- looks like I'm with the majority in 5% or less.
I hope this % number shrinks as i get older (due to my Net Worth Increasing !??)
ET

 

[gisele2]

We did not have the chance to travel this year so what we saved is the money we have to buy DVC.

 

[RyanDisneyDad]

I'd say were around 30%. Would be a lot smaller if we included house. Disney is the majority of our entertainment. Weve been buying a contract every other year. It's also an investment for me as when the kids get older we will probably rent points out to fund different trips.