What do you advise your teens/older kids re:timeshares/DVC?

[miamimama]

Recently, my DD15 and I were watching a popular financial advisor absolutely slam timeshares, and my DD15 ask me if that was not what we had at DVC. Of course, I explained to her that DVC is better and different than most timeshares, although I have heard this same financial advisor, several years ago, advise against DVC . I know that timeshares, and DVC are not advisable for everyone, but I have seen many people on this board be advocates for the better timeshare companies, and of course , for DVC. Any comments about what to say to your older kids when you are explaining your DVC purchase and general timeshare advice?

 

[Deb & Bill]

You have to look at it as a prepaid vacation and not as an investment. As long as you are comfortable going to WDW every year, there shouldn't be anything wrong with you buying DVC. Most other timeshares lose their value before the ink is even dry on your paperwork. We bought first in 1997 and then four more times after that. We sold two of ours and made a small profit on our sales, even after we paid our closing costs and commission.

If you get your money out of it, based on the actual cost it would take to pay Disney cash for the same lodging (and that is what you would actually use), then you haven't lost a thing. And if you really want to get rid of it without any problem, you just list it at a price low enough for Disney to exercise ROFR and it's off your hands (plus the cost of the commission). Disney has even said that they will buy it directly from members, but at a lower price.

 

[DVCLiz]

Recently, my DD15 and I were watching a popular financial advisor absolutely slam timeshares, and my DD15 ask me if that was not what we had at DVC. Of course, I explained to her that DVC is better and different than most timeshares, although I have heard this same financial advisor, several years ago, advise against DVC . I know that timeshares, and DVC are not advisable for everyone, but I have seen many people on this board be advocates for the better timeshare companies, and of course , for DVC. Any comments about what to say to your older kids when you are explaining your DVC purchase and general timeshare advice?

Who was the financial advisor??? Just curious...

I treat our DVC like any other "luxury" purchase. It's not something to go into debt for, but it's a nice extra if you can afford it. My daughter knows the basic ins and outs of DVC (she's 19 and just used it for the first time on her spring break with friends) but I don't think DD14 really knows that much about it.

I explained that I chose to use this amount of money to have access to WDW vacations for the next 35 or so years - long enough for our family to take all the WDW vacations we wanted, and hopefully long enough to take their families (they will be 48 and 53 when the first DVC expires, and will have an AKV contract until 2057, when they will be 63 and 68, unless they sell it before then!!)

I spent the same amount of money on our DVC that I would have on a nice midsize luxury SUV. So I could say we use the car unitl it's old and worn out, and then we might get some money back if we can sell it. But in the meantime we've had the pleasure of driving the nice car. I definitely don't say it's an "investment" of any sort.

 

[ZekeKelso]

Good opportunity to teach your DD not to blindly trust "experts". Ask

- Does the adviser explain why timeshares are bad?

- Is her explanation logically sound?

- Do her critiques apply to DVC?

Who knows - maybe it will get the kid interested in financial matters.

 

[crisi]

Vacations are a luxury purchase. Timeshares are a commitment over time to a luxury purchase. No timeshare should be purchased - even DVC - until you can pay cash, commit to the vacations financially, and have your other financial priorities funded.

When you have all this, if you want to blow your money on a timeshare (like Mom) or an expensive car (like Dad), its your money. But before you start blowing your money on things like that, you should be funding your retirement, not have any credit card balances, be able to overpay your mortgage (if you wish), have an emergency fund, etc.

 

[miamimama]

Who was the financial advisor??? Just curious...

I treat our DVC like any other "luxury" purchase. It's not something to go into debt for, but it's a nice extra if you can afford it. My daughter knows the basic ins and outs of DVC (she's 19 and just used it for the first time on her spring break with friends) but I don't think DD14 really knows that much about it.

I explained that I chose to use this amount of money to have access to WDW vacations for the next 35 or so years - long enough for our family to take all the WDW vacations we wanted, and hopefully long enough to take their families (they will be 48 and 53 when the first DVC expires, and will have an AKV contract until 2057, when they will be 63 and 68, unless they sell it before then!!)

I spent the same amount of money on our DVC that I would have on a nice midsize luxury SUV. So I could say we use the car unitl it's old and worn out, and then we might get some money back if we can sell it. But in the meantime we've had the pleasure of driving the nice car. I definitely don't say it's an "investment" of any sort.

Financial advisor was Suze Orman - We love listening to her show and she often has great advice, except when she disagrees with me!

I recall her previously advising against DVC as well.

 

[Paging Tom Morrow]

Simple. It's a matter of convenience. I could choose to place my money into the stock market and withdraw the annual profits to pay for my yearly vacation for at a Deluxe resort, but instead I choose another way that will cost me more money, but save me the aggravation of having to worry about tax codes, dividends, and multiple other hassles.

Every day, we all make choices to what is more valuable. For some, it's the car they drive, for others, it's their kitchen appliances. For me, it's my yearly minimized hassle trip to the World.

 

[cincinmouse]

I am in the financial planning field although not a fan of Susie typical black and white statements of this is always bad and that is always good. I analyzed my DVC purchased from every angle and in almost every position investing in DVC vs something else does not make financial sense. I had a very hard time pulling the trigger. You can make the numbers say whatever you want it is just how you look at them. For me it came down to DVC helpS us to plan vacations. One thing you can not put in the cost justification equation is the memories you have with your family. This is a good opportunity to explain to your daughter that one can never make blanket statement about a subject and that every individual situation is unique. To me that is what make DVC point system so great is its flexibility. But I do agree with other PP that this is a luxury purchase and should not be purchase instead of saving for retirement or college fund.

$600 MF, $15,000 on SSR points, Look on DS,DD faces when they run into Mickey and Minnie's arms = PRICELESS.

 

[Brian Noble]

For the most part, she's dead on.

She's absolutely right about buying *most* timeshares from the developer. For example, Wyndham deeds lose 75-90% of their value as soon as the ink on the contract dries. Disney is not one of these.

She's also right if a purchase leaves the purchaser underwater compared to market (not developer) rents, given a set of time-value of money assumptions. DVC purchases sometimes fall into this category, depending on precisely what you are buying, how you plan to use it, and what your investment alternatives are. The fact that DVC rentals are such a fluid market actually works against owners in this case.

She's probably right if you are financing from the developer, because the interest rate usually is not attractive---overall costs can then be higher compared to renting at market rates. This is almost certainly true of Disney; I haven't looked.

She's also right if you don't have a very firm idea what your vacation habits are going to be for the next 10-20 years. I know a few former DVC owners who discovered, much to their surprise, that once the kids were out of the house, Disney just wasn't where they wanted to go every year or two anymore---that other, less expensive but just-as-nice (or nicer) resorts in Orlando suited their evolving tastes more fully.

She could be wrong if (a) you make a smart developer purchase (and Disney often can be) or (b) you take advantage of an inefficient resale market to get a spectacular deal (tends to happen more often for other systems.) Someone buying Wyndham from the developer is almost certainly being taken to the cleaners. Someone buying the right Wyndham deed resale is making out like a bandit compared to market rents.

 

[hellerjw]

It is a luxury item so from a strictly financial standpoint its an unnecessary expense and those are the types of expenses any financial advisor looks for when recommending their particular debt reduction and/or investment strategy. They are looking for ways to free up more of your monthly income to pay down debt or use in their basket of investments, which is where most of them make their money. That's not a bad thing, its just the nature of their business.

The celebrity financial advisors, like Suze Orman, tend to use generalized advice to appeal to the largest group of people and therefore sell more books, get on more TV shows, etc. Her comments aren't necessarily wrong but are generally geared toward people already in financial trouble or burdened with large debts.

If you have the money to pay for it and want to do it, then there is nothing wrong with it. You just should never sacrifice other more important things (investing for retirement, college funds, etc) to pay for a luxury item. Those are the types of lessons you can teach your kids, which would more than justify your DVC purchase.

At least with DVC, you have historically been able to recover your initial investment through resale. That is pretty unique in the timeshare industry and is one of the main reasons we purchased DVC vs. another timeshare. Most other timeshares are virtually worthless a few years after purchase.

 

[Alexander]

Oh who cares....You can't take it with you! Enjoy it while your still vertical!\
Seriously...our mortgage is paid off in three years and we owe nothing other than the payments on my car. Life is too short to not enjoy it to the fullest!

 

[luna99]

Financial advisor was Suze Orman - We love listening to her show and she often has great advice, except when she disagrees with me!

I recall her previously advising against DVC as well.

When I told DH I wanted to buy into DVC he told me I should contact Suze and ask her if we can afford it and see what she says. (knowing full well that she thinks "Timeshares" are terrible). Did she SPECIFICALLY say someone should not buy DVC?

I still love Suze though!

 

[jbrowna]

Oh who cares....You can't take it with you! Enjoy it while your still vertical!\
Seriously...our mortgage is paid off in three years and we owe nothing other than the payments on my car. Life is too short to not enjoy it to the fullest!

Amen, brother Alexander!

 

[Dean]

Dave Ramsey has said the same thing and it simply shows their ignorance in the area of question and their arrogance to presume to have all the answers about something they know essentially nothing about other than the fact they've heard horror stories mostly third hand or dealt with people that bought something on impulse they paid $20K for that's work $2 and they never use it. Certainly for impulse or uninformed purchases and most developer purchases, the info is accurate. But so say timesharing is bad for these reasons is no different than saying one should never buy a car. The correct answer is to get informed, decide if it'll work for you and pay the true value of the item rather than the developer price.

 

[TenThousandVolts]

Did she SPECIFICALLY say someone should not buy DVC?

Yes- I saw one a year or 2 ago when someone called in in the segment "Can I afford this?". They wanted to buy DVC. They had tons of savings, retirement,... all set up. And Suze said, (paraphrasing) 'Yes you technically can afford it- but DON'T DO IT. You are not going to want to go to Disney World over and over again... When you want to go just plan a trip and go. Don't lock yourself in to a lifetime of maintenance payments and mandatory trips to Disney WOrld.'

 

[DisFlan]

Pooh on the investment gurus. We bought DVC (with cash) for prepaid vacations, period. And it's done a good job so far. We put our son's name on as an owner, and when we're too old to enjoy it (or gone) he can do whatever he pleases with it.


DisFlan

 

[Quiksilvr]

You are not going to want to go to Disney World over and over again... When you want to go just plan a trip and go. Don't lock yourself in to a lifetime of maintenance payments and mandatory trips to Disney WOrld.'

I'm totally cool with mandatory trips to Disney World. I love how these gurus decide what you will and won't want to do with your time and money. Just because Suze doesn't want to go to WDW every year doesn't mean other people can't/don't/shouldn't.

We bought DVC for intangible reasons; we want the memories, we want to be forced to vacation, we want to go to WDW, we want to stay in large accommodations when we go to WDW, etc. There are a number of people out there who can't see that side of the equation...to them it's all just dollars and cents. Obviously, if a family isn't in a position to be able to truly afford the purchase then they shouldn't do it...but if you've got the money, go for it.

I wonder if Suze would tell someone with $10 million in the bank that buying a timeshare is a stupid, irresponsible financial decision. I think at some point, you gotta let people spend their money.

 

[RLRDA]

And Suze said, (paraphrasing) 'Yes you technically can afford it- but DON'T DO IT. You are not going to want to go to Disney World over and over again...'

 

[LadyKay]

I'm totally cool with mandatory trips to Disney World. I love how these gurus decide what you will and won't want to do with your time and money. Just because Suze doesn't want to go to WDW every year doesn't mean other people can't/don't/shouldn't.

We bought DVC for intangible reasons; we want the memories, we want to be forced to vacation, we want to go to WDW, we want to stay in large accommodations when we go to WDW, etc. There are a number of people out there who can't see that side of the equation...to them it's all just dollars and cents. Obviously, if a family isn't in a position to be able to truly afford the purchase then they shouldn't do it...but if you've got the money, go for it.

I wonder if Suze would tell someone with $10 million in the bank that buying a timeshare is a stupid, irresponsible financial decision. I think at some point, you gotta let people spend their money.

Well said

 

[jana]

I have to agree with all the comments of " do your research and run the numbers for your particular situation"

Everyone has their own personal slants on subjects and Suzie obviously has hers. However I agree with Dean it is an ultimate arrogance to presume you know/understand everyone elses situations and desires better than they do (particularly when you haven't even met them). Many people find it strange for people to love going to Disney virtually every year. However I would challenge anyone (Suzie included) to sit at the front of the MK and not be moved by the unbridled joy of many of the guests coming through the gates. In particular to study grandparents coming with their grandkids. So many people ( particularly DVC members) have established family traditions of bring their kids, then their grandkids and even their great grandkids to WDW. The detractors show their ignorance by assuming that by visiting WDW almost every year you are having the same vacation every year. You can't buy happiness no matter how much money you have and you can't take it with you.

I think Suzie would be interested to know that the largest part of DVC members come from banking,accounting and other professional areas who have run the numbers and know the economics are sound. I would agree don't be pressured into making a decision on the spot ( DVC doesn't make you) and make sure you run the numbers a couple of ways to be certain you haven't made a basic error.