Updated DVC info at Mousesavers.com

[rinkwide]

I may have some very different conclusions to offer once that's done...

If you end up joining can I get the referral bonus?

 

[drakethib]

I agree that it's an incredibly complex subject with a ton of variables. I've actually regretted even starting this project a few times -- it's taking over my life!

Thanks to everyone who has posted on these threads. I am very appreciative of the constructive criticism. I don't take any of it personally, even if it's meant that way.

After spending the day developing a number of spreadsheets, in part based on some issues raised by Caskbill, I am seeing some interesting and unexpected patterns. I'm having my results vetted by three very smart people and we'll see where that goes. I may have some very different conclusions to offer once that's done...

Mary
MouseSavers.com

Mary.

Don't let them get to you. Your site kicks booty!!

Not everyone who owns DVC has done a complete financial analysis (even though I work as a Cost Analyst for a Texas Refinery) or even wants to. I bought DVC because it works great for me and my wife. Every time we go to WDW it puts a great big smile on our face. Now what kind of price do you put on that?

I have never thought of DVC as an investment, possible tax deduction, or whatever. The check I wrote for DVC was much like the money I would spend on a candy bar, they both satisfy a want or a pleasure in my life. The money is gone and it won't be back.

I have been on these boards for about a year now, and I can tell you some people go ballistic if anything remotely negative is said about DVC. But know that these are some good people on this board and always try to help other Disboard members.

I would like to thank you for your work on your site, much like the Disboards, it is a great place for Disney information (and even saving money elsewhere) for many people.


Thanks and keep up the good work.

 

[Maribel]

After spending the day developing a number of spreadsheets, in part based on some issues raised by Caskbill, I am seeing some interesting and unexpected patterns. I'm having my results vetted by three very smart people and we'll see where that goes. I may have some very different conclusions to offer once that's done...

Mary
MouseSavers.com[/QUOTE]

Mary, I'm glad you are reconsidering your math for the article. One of the reasons I purchased DVC is because it was financially a good move for those of us that want to stay in Disney property on a regular basis. I did my math in a different way that Caskbill does. I take my initial investment and divide it by the number of years I will have available. To make my story short, in my case the cost per point is about $5.6 (if your are interested in the details i can publish my spreadsheet). With that, I can stay in a studio in the Beach Club or Boardwalk during a weekend day of October (during Food and wine festival) for $129 or $67 during a weekday. There is no AP or FL resident discounted rate or AAA discount that can get such a low rate for those hotels, not to mention the stress of waiting for the rates to be published.
Even considering the case of financing my purchase through Disney (which I didn't, but I did calculated the cost per point in that scenario), the cost per point in my case was $5.9 (financing 90% of the purchase price for 3 years at 9.7%/year). That is I would still be able to get the studio for $136 on the weekend, still lower than the over $200 that an inn room will cost me with the discounted rate.

In other words, of course it would be better if you could pay up-front (wouldn't it be nice if we could live debt-free?), but if you finance you purchase it doesn't really mean that you are taking away all the financial benefits of your purchase. It just means that you are saving a little less in the long run.

Now, here is the other point that really convince me in doing this: for about the same price of a deluxe room in WDW (discounted), I can get a 1 bd villa with a kitchen in a DVC resort. For me, with a 2 year old kid, this is the most awesome benefit of my DVC membership, financially speaking.

But wait, I want to take the opportunity to talk about some other savings in accomodations. Let's say that I want to splurge one year and stay in a WDW Deluxe Resort, not in a DVC villa. The points are higher, right? I shouldn't do it, right? I would be better of getting a discounted rate, right?
Let's see... In your site you have that for stays during august-october 2005 the AP discounted rate fo a standard view at the Poly is $234+taxes, or $261/night. I can get the same room for 36 points during a weekday, or, using the $5.6 cost/per point I calculated above, $202, or $212 with a financed contract. In this case the cost for a weekend stay would'nt be reasonable, but still, where is it that there are no financial advantages to DVC, even if you need to finance?

I would also like to tell you that, before purchasing and after reading your previous article in Mousesavers.com about DVC, I did some analysis considering that instead of buying, I put the money (the same amount that the points would cost me) in some type of banking instrument that paid me about 5% in interest rates per year and that was readily available. I would simulate that every year I would add to that account an amount equivalent to what I would pay in DVC annual dues with the 3.12% annual increase (compounded), and at some point during the year I would substract the equivalent of what it would cost me to stay in a deluxe resort with a FL resident rate for about the same number of days of what my points would allowed me + what I have paid in taxes for the interest received. I would provide for a 2.5% increase in the rates (compounded).
The conclusion was that by the year $2016 there was not going to be any money left in the account to cover for future accommodations in WDW!!!
Now, if someone know about a banking instrument that that can guarantee me that % in interest and is readily available, please let me know because I have yet to see it.

One good reason not to buy into DVC is for people that is not thinking about going regularly and frequently to WDW and stay on site. But if you do or are considering it, and are currently paying rack rates or discounted rates, you should really think about it, even if you need to finance it and compare it to the current and proyected future costs of accommodations.

 

[jodifla]

After reading the article, my take on it is that it is quite negative, even if it tries to be balanced with lots of "facts." Truth is, you can spin numbers a lot of ways.

DH and I financed our points thru DVC back in '96. This was after we had a house, and before we had kids. We treated it like a car loan (a car we'd own for almost 50 years!) and we offset the payments by taking our vacations at Disney instead of elsewhere, so we weren't financing in addition and then also taking lots of vacations at other venues. We bought in at the minimum 150 points, and took lots of Sunday through Thursday trips. After we paid off the first set of points, we did a 56 point add-on after we saw our vacation routine.

Now we only have our dues, and everytime we walk into our two bedroom vacation home, we congratulate ourselves on buying in. We'd never take these kinds of vacations without DVC.

Just go over to the resorts boards to see all the folks scrambling for "deals". Then you get a true idea of the value of DVC.

Hotel prices are absolutely skyrocketing, and those of us smart enough to buy into DVC have shielded ourselves from those increases.

 

[JohnNJ]

I wrote to a moderator of this board and asked why, but got no response.

Mary:

Maybe they don't have time to answer e-mail, like you.

http://www.mousesavers.com/contact.html

John

 

[spiceycat]

Mary, I love your website.

It is definitely one of the best!!!

I brought DVC in 93. I was a bargin then because it included free tickets until 12/31/1999. the idea was to put money away to buy tickets NOW. Yea right!!!

used it to stay at WDW hotels.

Anyway as Caskill has pointed out, it is a good deal for me.

I stay in studios - the cost per point at OKW is $3.86 I subtract the property tax (it comes off on my income tax) $3.01

a studio in Jan, Sept, Oct - most of Nov and Dec is 8 points a night at OKW.

so I can stay onsite at Disney and paid up $24.08 a night. those are my costs. I can easily rent this studio for $80 a night. but most of the time I am staying there myself.

I love Disney - I am single, don't have any children, but I still go to WDW every year. when I get tried of WDW then there is Orlando and the surrounding area. there are a ton of things to do in Orlando. I think there are over 150 things to do in the immediately area besides WDW, US/IOA or Seaworld.

Now I have said before if you are used to staying in a hotel room and your family is four or less and suddenly you decided that you HAVE TO HAVE a 1 or 2 bedroom. then yes you can easy get into financial problems. but that is not DVC fault. (you need more points to kept this up and thereby start doing add ons)

I had to finance my purchase - no regrets at all!!!

sometimes the resales are because of other things than money problems. Some have been divorced, deads, and other things. back when OKW (DVC) didn't get free tickets anymore there were a bunch of OKW's on the market.

I sold my DVC VB because I have another timeshare on the beach I like more. Besides VB was the more expensive point maintence wise and I couldn't see kepting it to use at OKW.

your friend who owns Disney $2,000 each year in maintence fees. If she is unhappy why don't they just sell it????

lots of people even on this site will disagree with this statement. I don't think Disney will ever remove the ROFR.

why? because if the resale market does go down. WDW can simply buy back the DVC and rent it through CRO.

they certainly aren't about to let the market fall out and have competitors stay on Disney property cheaply.

I think the worst that can happen to DVC, is that Disney decides to get out of the market. Then they become a Marriott, Hyatt or Hilton. I would sell if this happens. Disney service is one of the best. I love staying in a Marriott or Hilton but the costs are higher for the service you get.

the contract we have with Disney allows this to happen.

right now I think Disney appreciates the loyal of the DVC fans. We kept coming to the parks even doing the 9/11 event and after. But it is a corporation when the bottom line says to sell it. I have no doubt they will.

 

[DizWacko]

I think there are very good points on both sides. Some of the people here however are WAYYYYY too sensitive about their DVC purchase. I sense that they feel personally attacked when someone doesnt see the merits of DVC purchase, and they MUST justify their purchase to others like they are trying to convince themself at the same time.

There is no magic YES and NO answer for everyone ..

Marys article is an INTRO to DVC, and a damm good one !!

 

[dsneygirl]

One thing I see totally misleading is the heavy emphasis on the compounded annual dues increases and comparing them to the compounded rate increases for regular hotel rooms.

Totally missing is the fact for example that a 5% increase on $20 is a lot less money than a 5% increase on $200.


Using her figures, she states that today SSR dues are $3.83/point and that by 2054, if increases hold at 3.12% compounded annually, they will be $17.26/point. This is all true.

She also states that a room at the Yacht club increased only 2.6% compounded annually for the last 8 years. Fine. Let's say it only increases at a rate of 2.6% upto the year 2054.

A Studio at SSR, midseason weekday is 12-points/night. With dues at $3.83/point, that's $46.20/night. (that's total: remember, there are no taxes) In 2054 at $17.26/point it will be $207.12/night. That's a 3.12% compounded annual increase.

Today she states a room at the Yacht Club is $345/night. If it continues to increase at it's lower rate of 2.6% compounded annually, then by 2054 it will be $1213.50/night. Or, after taxes, around $1359/night, or $1152/night MORE than the DVC room.

OK, let's try to be fair about this. We know that weekend nights take more points than weekdays so let's include a weekend. 10 days at SSR mid season in a studio (as close as apples to apples we can get when comparing to standard WDW hotel rooms, even though a DVC Studio is better), is 148 points. If someone purchased 150 points, stayed in this unit every year to 2054, then including the 3.12% compounded dues, they will have paid a total of $66,253 for all those stays. Add $14,700 for the initial purchase, and their total outlay was $80,953.

And that was using only 148 of your points. If you used those other 2 points every year, they add up to almost 100 points, or another 8 nights.

If instead they stayed at the Yacht Club, which ONLY had a 2.6% annual rate of increase, then for those same 10 days over that same length of time, including tax, the total paid would be $387,714, or in excess of $300,000 MORE than staying at the DVC resort. And that's 8 fewer nights than the 150 DVC points would get you)

If Yacht Club instead compounded at 3.12% (the same number she used for DVC), then those same days would total to $451,630 !

OK, say you can get a WDW room for only $150/night today using some kind of discount code. And say you can get that same kind of deal, where it only compounds 2.6% annually.

For the same 10 days/year, by 2054, including tax, you will have paid a grand total of $196.331, or over double the DVC room, which included the initial purchase.

Final comment:
She states in 1991 OKW dues were $2.51/night. OK, so for a weekday night in an OKW studio, Adventure season, (8 points), I paid $20.08

Today, OKW dues are $3.86, so that same room now costs me $30.88 for the night.

That's a total increase of $10.80/night over the last 14 years. I challenge Mary to find me ANY WDW regular hotel that has a rate today that is only $10.80 more than it's rate in 1991.

I do not find her use of Statistics balanced in any way for the simple reason she is completely ignoring this simple fact: I repeat, a 5% increase on $20 is a lot less money than a 5% increase on $200. Emphasizing the compounded rate increases in no way actually reflects the true monetary differences between owning DVC and staying in WDW hotel rooms instead.

Thanks for this very thourough analysis.

 

[FoodLover]

I would like to apologize to the moderators of the DVC Forum. In the first page of this thread, I ranted a bit about a previous post that was removed, and speculated that my posts on this thread would also be removed.

I've heard from one of the moderators and I agree that the reason for the removal of my earlier post was legitimate. I had done something stupid -- started a completely new thread responding to an old thread.

You'd think, given that I am an "old hand" on these and other boards, that I would have known better. I can only plead temporary insanity.

Thanks to the board moderators -- and especially to the board members -- for allowing me to participate in this discussion.

Mary

 

[bongo59]

as one of the DVC orginals..........since 1991 i dont need to be convinced or convince anyone............my Tax attorney and CPA did the analysis for me in 2002..............we saved over 130K since 91 with DVC..........we also have added yrs 2003-05 to it and we are now up 155K............We also loooked at market returns and opportunity costs of owning and that was the only time we came up a loser...............the bottom line is i would have spent the money at WDW even with all the wonderful discounts at Mary's site..............but the bottomline is i saved a small fortune on my vacationing since 1991 with DVC...........it is not for everyone and NO ONE should finance it ever in my view..............but if you go to WDW at least twice a yr for more than 3 out of 5 yrs.............youre financially making a collassal mistake in not buying DVC..................Our financial people think financing any vacation expense is pure lunacy especially when add the opportunity costs and inflation cost of that money compounded in the market..............it makes alot of sense but most people dont use common sense when making purchases like these...........infact all timeshares are sold in the US really without letting the buyer truely runt he numbers...............that is why FLa enacted the recision times yrs back....................

 

[mstec]

Hardly. It <I>is</i> an improvement but still remains a clear arguement against DVC (which is quite understandable considering Ms.Waring's profession).

I thought the same thing, and I too figured that was why she was coming from that perspective. I felt she left out a couple of key points or at least skimmed over them, that were key for, at least our family, in making our decision to choose DVC.

1) We are a family of 5, and do not fit easily in a WDW hotel room, or any hotel room for that matter. We really wanted the opportunity to stay in a 1 or 2 bedroom, but couldn't afford spending the high price tag. In comparing the cost of a hotel stay to a DVC membership cost, the comparison needs to be between the cost of a 1-bed on cash, vs. 1-bed on points. Otherwise, it's apples to oranges.

2) The other thing I noticed was a small reference to "other (non-Disney) vacations" , however that is really a big benefit of the DVC membership and the "Points" exchange is reasonable to the DVC member, for a 1 or 2 bedroom, since a Disney vacation is a hot commodity for trading.

Don't get me wrong. I find Mary's site invaluable for all things Disney, however I thought she was off a bit off on that article.

 

[palmtreegirl]

I think there are very good points on both sides. Some of the people here however are WAYYYYY too sensitive about their DVC purchase. I sense that they feel personally attacked when someone doesnt see the merits of DVC purchase, and they MUST justify their purchase to others like they are trying to convince themself at the same time.

There is no magic YES and NO answer for everyone ..

Marys article is an INTRO to DVC, and a damm good one !!

 

[sgtpet]

I read the updated article on Mousesavers and I have to give Kudos to the author. It gives a fairly objective point of view on DVC.

My personal opinion is that DVC is not as valuable as it once was due to the high cost of points.

 

[SleepyatDVC]

Mary,

I read the article for the first time today and saw you had already added some of the points mentioned in this post! I think you did a GREAT job!

I think it is very obvious that this is YOUR opinion about the pros/cons of DVC ownership. And that's fine because it's YOUR website!

Hey we do it all the time here on the Disboards, spouting our opinions on the benefits and sometimes drawbacks (addonitics counts right?) of DVC ownership to everyone who would listen. Can you blame some of us for being a bit jealous that you have a much bigger audience that already really respects your opinion?!

Anyway, back to your article - thank you for taking the time out to write something so comphensive! I think it includes MANY factors that would take a prospective buyer days if not weeks and months lurking around the Disboards to figure out!

Did you maybe leave some "additional points or factors" out? Maybe. But what thread, post, or even multi-threads here on the Disboards (which I consdier one of the most knowledgeable forums) has included EVERYTHING?

And as others have pointed out, even here on the Disboards, many do not agree with other each other on many aspects of DVC - although, I guess we did all agree to actually buy in!

Some people have commented that your article was too slanted to the negative aspects of DVC. You disclose your financial conservative position (which I also share) from the beginning. Your article was written to give a liitle primer to DVC and to point out things you feel potential buyers should consider BEFORE making such a big financial decision.

I think if someone is interested in DVC they are or will be quickly familar with all the great selling points - DISNEY! DVC has no problem seeling their product, direct or even through the resale market. They certainly don't need another cheerleader helping to move their product!

This is how I see it - You point out some of the major benefits of DVC, but your "job" is to point out areas of "concern" about DVC that potential buyers won't find easily elsewhere on sales brochures and other informational pages such as those set up on the major resale broker sites.

There are plenty of other resources to find out some of the great benefits of DVC besides the potential buyers own desire to "own a piece of the magic."

Bottom line is that your website is geared toward helping people make the best use of their money at WDW (and other related locations). People who desire to get the most "bang for their Disney buck" and those people who would normally not be able to afford a Disney vacation without some of your money saving ideas and advice are drawn to your invaluable website.

I'm one of the former types of people. Even though I have been a DVC member since 2001 (love it so much, we added on this year), I still frequent your site for the car rental deals. And yes, I admit I do browse around some in other areas. Sometimes, I pout becasue I can't take advantage of some of the awesome deals that come out but most of the time, I'm just glad that I have my luxurious accommodations locked in, am assured of a future trip, and am just lucky enough to afford DVC.

I think that many of your subscribers and web browsers are of the later type of people. People who without knowing about some of the deals and money savings tips you post would not be able to afford a trip to the World or would have to be in debt for years if they went anyways at rack rates.

The Mouse is very seductive and additive. And "unfortunately", these boards (both yours and the Disboards) just feed our addiction (yes I am an addict too). A "once in a lifetime" trip becomes an annual trip, etc. and it just seems that all roads seem to lead to DVC for many converted Disney addicts! Lol! And believe me the addiction doesn't stop there - there's also the add ons!

It makes total sense to me that if your personal financial perspective is conservative and your ultimate goal is to help those to be careful with their money, then while you can knowledge that DVC has benefits, there are also serious financial considerations.

Because the last thing anyone wants is a family contemplating a "once in a lifetime" trip, making it an annual one and then being seduced into DVC (because it seems every Disney fanatic like them is joining) and THEN finding out that they really CAN"T afford annual trips much less DVC. Even if they can afford DVC itself, there are definitely added expenses of park tickets and food and transportation, etc.

Yes, people can rent out their points to offset the costs. That's what I told myself to "justify" our latest add on. But not that many people actually have the knowlege or go to the effort to do so. I have the knowledge at my fingertips here at the Disboards, but even though I can and SHOULD rent out some of those points to make the most out of my money, what do I do? Tack on a weekend, contemplate a longer trip or bigger accommodations next year instead. Check out my closet at home full of great stuff that would be perfect for ebay, if I EVER get around to it! I guess the financial moivation isn't enough for me to do it. For those that are having serious financial movations, having to deal with DVC point rentals maybe just one more burden they have to deal with.

Yes, people can certainly sell the DVC without losing too much capital at the moment and some may even see a profit. I know that I certainly will and I only bought 4 years ago. And I'm not even counting the trips I made already. But tell that to the kids! Just because people can sell, doesn't mean they will. They might be hanging on to the contract, lying to themselves that they can afford it, until their financial pit is way too deep.

Yeah, yeah, I'm being a little too depressing. And most people have or should have a good head on their shoulders and can decide on their own about what they can do or not do with their money. I'm not advocating being a money police.

But an article being a little "conservative" about DVC to "budget conscious" people is not a bad thing. They can get a pep rally elsewhere. A vacation is seductive enough as it is - think of the thousands of timeshares being sold to uninformed vacationers - but a DISNEY vacation is even more seductive, I think. So, a little dose of reality, albiet a little cautionary one, is not going to hurt anyone and maybe help someone make a financial mistake.

Which is worse? A person who can afford DVC made the mistake of not buying, buys later at a higher price and regrets not buying earlier (remind you of anyone? ) Or a person who buys DVC but really shouldn't have based on any number of reasons?

O'kay off my soap box. How in the world did I get started on this novella?!! Anyone think my boss will notice that I'm not WORKING?!!!!

 

[andriade]

This has been very educational for me. Thanks to all. I feel great about my purchase.(paid cash BTW) My kids are young and we have a lot of WDW vacations to go!

 

[Y-ASK]

I think the one point that seems to stand out in this thread is that you should not finance your purchase. Main reason why is because the interest you pay is gone forever which adds to the total purchase price. But what if you could finance your purchase and pay yourself that interest. Now this is not for everyone but it is something to consider. If you can afford it, take out a loan on your 401K to finance your purchase. Now before you bean counters jump all over me, let me say that over the last 4-5 years I have yet to see any investments yield over 5% return. In fact my 401K tanked pretty bad during the bust and at this point in time I'm still in the red almost 20%. You need to remember most 401K limit you as to where you can put your money so please no wild stories about making 25%-35% in futures. That kind of investing does not work with 401Ks. With my particular 401K account I can get half my money out and then pay myself back at 8%. Show me an investment where I can make 8% and I'll change my tune. But this only works if A. You have a good job with no sign of being layed off any time soon and B. You trust yourself to repay the loan. I personally think I'm good for the pay back . And my work allows me to automatically pay back the loan without ever seeing the amount in my paycheck. One last thing to consider, I could be proven wrong in the next couple of years if the Stock Market really takes off and my 401K earns over 8% but right now and over the last 6 months my purchase is looking pretty good .

Y-ASK

 

[CarolMN]

FWIW, anyone who takes a loan from his/her 401(k) better be absolutely, positively 100% sure they will not want to change jobs or be laid off before the loan is padi back. If you can't repay the loan at that time, the IRS will consider it an early distribution (assuming you are younger than 50 1/2 years of age) and in addition to the income taxes you will now owe, you will have to pay the IRS a penalty of 10%. Not a good thing - esopecially if you've just been laid off!

There are other things to consider as well - best to get advice from a financial professinal before you do this. Very, very few advisors will recommend it and there will be unique circumstances when they do.

Best wishes-

 

[Y-ASK]

There are other things to consider as well - best to get advice from a financial professinal before you do this. Very, very few advisors will recommend it and there will be unique circumstances when they do.

I agree 100% with your assessment and caution but most financial professionals want you to invest in their company's stock plan. They can't get at your money if it's been used for DVC so they advise against it. They always seem to boast about the rosey side of investing and play down the risk and only seem to talk about the days when you could make 18% on mutual funds. The only problem is that these types of returns are short lived and unless you're smart enough to know when the stock market is going to take a severe drop and get out there's not much you can do but hope you change your investment options when they are on the up swing. And don't count on those financial professionals to know when the stock market is about to tank either. They know about as much as you do . Maybe I shouldn't generalize and narrow my comments to the kind of financial advisers that the average 401K holder has access to. Now if you got some real money to spend there are some good folks out there.

Y-ASK

 

[disneyberry]

If you can afford it, take out a loan on your 401K to finance your purchase.

 

[FoodLover]

Well, I've updated the article AGAIN after running a bunch of numbers and consulting lots of people -- including owners and at least one bonafide math genius. It's significantly expanded and I think the pro-DVC folks will be a lot happier.

Not that I feel I must make everyone happy! I think SleepyatDVC explained my position better than I could myself: my job is not to be a cheerleader for Disney (though heaven knows I like Disney a lot more than the average person!)

My goal has always been to help people get "a first-class vacation at the best possible price." If that means DVC, great. If not, fine.

Anyway, have at it -- I'm going on vacation!

Mary