Psychological traps of DVC

[Girlstar30]

I personally will never pay for trip insurance again.

I was in Poland when the border shutdown when Covid hit and almost got stuck there. We raced to the border and there were no flights to LA. Our only hope was a flight to London in hopes that they had a flight to LA.

I was scrambling looking for anywhere nearby, Las Vegas, etc and nothing. Flew to London and thank God found a flight out of London to LA the next day.

Trip insurance refused to pay. I looked thru their policy with a fine tooth comb and border shutdown wasnt an exclusion and no mention of a pandemic.

I Noticed they added onto their policy right after that border shutdowns were an exclusion after the fact. Total scam. Never again. The tour company gave us our money and reimbursement for the flight anyways so no need for it.

I could have sued them, but since I got my money back I just didnt have the energy. Left a bad taste in my mouth ever since.

 

[Girlstar30]

One advantage of owning is that you actually own something of value that you can sell, often for quite a bit more than you paid for it. Suppose you bought your 100 PTS (or whatever amount) at $99 a point and now some 20 years later you are tired and retired and decide you don't want them any more. The going rate for your resort is now $180 a point so you decide to sell and make about $16,000 after fees and such. Not a bad deal for 20 years of vacations that initially cost you $9900 plus fees and the MFs over the years.

How much higher can the dang rack rate go lol studios are alr3ady at $700 something are we really going to see over a thousand in the next few years, its insane.

People aren't stopping going to Disney, they offer payment plans for the vacation packages, tickets and everything included, i suppose prices can continue can climb because a payment plan makes it possible, im so glad I bought dvc, the greed never ends

 

[Girlstar30]

One advantage of owning is that you actually own something of value that you can sell, often for quite a bit more than you paid for it. Suppose you bought your 100 PTS (or whatever amount) at $99 a point and now some 20 years later you are tired and retired and decide you don't want them any more. The going rate for your resort is now $180 a point so you decide to sell and make about $16,000 after fees and such. Not a bad deal for 20 years of vacations that initially cost you $9900 plus fees and the MFs over the years.

I just have to make sure I sell before it gets close to running out. Im hoping with all these restrictions and new rules coming og contracts will be a hot ticket.

 

[DoubleBaconBLT]

Except that the argument is not "invest vs. buy DVC". The argument is "pay as you go or pay up front."

Here's the basic idea. Suppose you know you want to stay in a DVC 1BR for a week every year during Spring Break. There are two ways to do that. One way: Buy enough DVC points to make that work and pay your Dues each year. The other way: Put the purchase price into an investment account of your choice, and add what you would have spent on Dues each month from then on going forward. Then, each year, you rent a DVC 1BR from the supplier of your choice---a private owner, a rental broker, or Disney.

The question is: which one "costs less"? You have to make a few assumptions, but (a) they are not that difficult and (b) the answer isn't particularly sensitive to small variations in them. After that it is just 10th grade math plus a little bit of economics.

Every time this comes up, people seem to want to cast Option Two as "invest and never vacation," and that's not it at all.

This is such a good take. People love to talk about buying DVC vs investing and not spending the money, then concluding that the latter results in a better long term financial position. That's super obvious and silly at the same time.

I ran the math you described and landed at a 19% internal rate of return for my DVC contract when compared to rack rates. It's 12% vs the "standard" 25% discount.