Pros and Cons of Aulani Sub contracts for Sleep Around Points

[emchen]

Using a 4% discount rate to calculate the present value of the subsidy through the life of the contract gets me something like ~$47, meaning that the biggest premium I'd pay for sub relative to a non-sub AUL contract before the subsidy was no longer worth it. Seems like people around here get non-sub for ~$90, so paying up to $139 for sub is actually spot on! That's on the high end but makes some financial sense.

@DanCali look, accounting jargon!

With a 4% discount rate, the subsidy is worth a lot more than what you got...

What % did you use for the increase in dues?

For example, if you use a 4% annual increase in dues with a 4% discount rate, they cancel each other out. So the value of the (discounted) subsidy each year is worth same as in 2025 (~$2.50) for another 36 years - which is around $90/pt

To get to your number, I suspect you used 0% increase in dues? Obviously the less dues increase over time, the less the subsidy is worth. The more dues increase over time, the more the subsidy is worth (and the lower/higher the discount rate the more/less the subsidy is worth). Under what I see as reasonable assumptions (dues increase 3-4% per year and discount rate of 4%-6%, the subsidy is worth $55-$90/pt.

This is why I view the high prices of AUL (sub) (relative to unsubsidized) contracts in a favorable light.

Really? Wow, I for sure thought it was a flat amount of 2.50 ish. I love my sub points even more now.

I know right? Thank you disboards and accountants (or statisticians)!

 

[DanCali]

Just did some searching. The subsidy was $1.42 in 2011.

And that's why it's so valuable... When dues double in about 20 years, the subsidy will be $5/pt.

 

[D-Trick]

The only way my wife would accept me buying more points is if it's a subsidized Aulani. They are so rare in my Oct UY-- I can't confirm but I don't think DVD ever got to selling Oct to new members as every subsidized contract I've purchased has been an existing member's add on.

 

[emchen]

The only way my wife would accept me buying more points is if it's a subsidized Aulani. They are so rare in my Oct UY-- I can't confirm but I don't think DVD ever got to selling Oct to new members as every subsidized contract I've purchased has been an existing member's add on.

It may be worth it to open up another membership UY just for the next fat contract! Just saying.

 

[D-Trick]

It may be worth it to open up another membership UY just for the next fat contract! Just saying.