When do you start to save money?

[ToddyLu]

We love it, DVC that is...gone are the days of wishing there was ice in the vending area( we have a fridge and ice cube trays), gone are the days of watching TV from the uncomfortable bed ( we have a couch). Gone are the days or dreading going back to the room because there wasn't anything to do. At Kidani we can watch animals, hear a CM talk about the animals entertain ourselves in Community Hall, have a great pool, read a book in the Library. So those little amenities are important to us in our 40s. We do not have kids and use every last point we can.

With DVC came the APs and TIW card. So our next trip (Oct)our room is covered and the room for my MIL, our tickets are covered and we have 500 points (as of yesterday)on the Disney Visa to use for meals. So in essence we know how to play the game to make it work for us.

 

[cpfd910]

I have been going to WDW for 25 years and finally purchased DVC and now waiting for points to be loaded. I bought a loaded contract and will be going in Sept. I figure I can get at least 2 trips out of the banked points if not more. I purchased so I could stay in more deluxe accomdations. I have a 10 and 8 year old. Also there are times when we will try to switch out to RCI just for a change or just stay at DVC at not go to the park but use it as a home base and take day trips. Also I just sold my house in Vero Beach and will be using VB so we can visit friends. I do not look at it as an investment just a change for me

 

[joelp]

We're in the process of purchasing a resale contract at AKV for basically 5 reasons:

(1) We love going to WDW (especially the DD and I ...), and plan to go at least once every two years (and potentially with relatives and friends).

(2) We love staying at the AKL (soon to be AKV) - to quote the DW about 1/2hour after checking in there our first time: "That's it! I'm spoiled! I can't stay anywhere else, now!"

(3) It's will end up being a "gift" to the DD (and - hopefully - future GKs). Realistically, the DW and I are going to be using DVC for only about 20 years - which will just about the right time to pass it on to the DD (and her future DKs ... )

(4) It gives us another "reason" to head out to CA and visit Disneyland ... and then further west to Aulani ...

(5) It's a hedge against inflation, which may be the only way we could afford a trip to WDW 10+ years in the future - particularly since our "middle class" salaries have been flat while inflation (and prices at WDW) have been increasing 3+ % a year ...

Doing some quick calculations: at a 3.4% increase each year, 10 years from now an AKL Savannah View room will run about $565 a night ... Ouch!

At an average cost of about $14 per point (over the life of the contract), that AKV Studio will only cost the equivalent of about $240 ...

$240 is doable - $565 probably not ...


The savings won't be as great if we use 1BDR suites - but we like the plusses: our own bedroom with "master" bathroom, a kitchen, etc., especially as the DD gets older ...

We have developed a "vacation philosophy" over the years: Wherever we're staying should be at least as nice and comfortable as our home (tents being the exception ...

And the AKV more than meets that philosophy ...

 

[disneynutz]

Our room savings is offset by longer and more frequent WDW vacations. Our house is now a shrine to Walt Disney with statues and Disney products throughout.

Bill

 

[JennStar]

We've only been members for 3 years, so it's not a question of when did we start to save money as it is how our money is now spent. We are a numbers-crunching kind of family, so for a year and a half before taking the plunge, we did just that. When we made the decision, it was because we saw that the money that we were already putting into our moderate-level Disney vacations and weekend getaways (steady for 5+ years with no change in the unforeseen furture) we could be getting deluxe rooms and experiences. SOLD! And looking to add on more!

 

[hab321]

My wife generally goes to WDW about 5-8 times a year (with or without me ) usually for weekend trips (Fri, Sat and Sun).
We figured she would spend around $100 per night at a hotel. At that rate we're spending $1000-$1600 a year on hotels. Now we try to pick the good'uns, but hotels are hotels if you know what I mean (not exactly the safest places sometimes). So we initially bought at GCV for $14000 (after discounts). Our "break even" point will be in the 10-15 year range. I know I didn't figure yearly dues, but that cost if fairly minimal when compaired to property taxes (imo). So for us it was fine and we could afford it.
One of the biggest selling points to me tho, is the safety and convenience. I like the gated community asspect with security on scene. I also really appreciate the convenience to the parks. The buses run on a schedule and most stops are pretty close to the rooms. I really don't like parking at the parks and having to drive home after a long day of walking. Not all hotels have free shuttles to the park either. We just stayed in a Marriot and they wanted to charge $16 PER PERSON to drive us to the park. Unfreakin believable.
The last two reasons.....my wife loves hearing "Welcome Home" everytime we go and the daughter (for some reason) is ultra proud of being DVC. She brags about it to everyone (probably cause she doesn't have to pay for it).

 

[jockotaco]

For my family it was 5 trips over ten years. We made some assumptions in our calculations...

1) Hotel rates were not going up
2) Annual dues would not change
3) We didn't consider the future value of money
4) We were certain to take the following trips
a) Animal Kingdon
b) VGC (x2)
C) Aulani (x2)
Based on all specials and booking the trips today for springbreak/ summertime these five trips were our breakeven.

 

[Missyrose]

2) Annual dues would not change
.

Hopefully you now know that maintenance fees DO go up every year by an average of about 3 percent.

 

[Goofgoof]

The break even point can be calculated. I set up a spreadsheet. I was buying into BLT for 160 points at $94 on the resale market. Total "investment" of $15,540 after closing costs. I assumed the maint fees would go up 3.2% per year (which is the historic average for all DVC resorts). I also assumed room rates would go up the same 3.2% per year. In order to calculate the break even I assumed that if I put the $15,540 in the bank and earned 5% interest then paid cash for my WDW vacations how long would it take for that $15,540 to reach $0. For the cash rate I took the rack room rate for 1 week in a lake view tower room at the contemporary during regular season plus the 12.5% tax less a 25% discount assuming you could get either a room discount or free dining. Based on that I got to $2,989 for the week for that room. The breakeven point is 7 years. This means after your 7th trip you start saving money. If you compare it to a garden wing contemporary room during value season with 25% discount (cheapest room rate at the resort) it takes 12 years. Comparing to rack room rates at Caribbean Beach it's about 22 years. There is no break even for the value resorts Here is an example. Each year I add the maintenance fees plus the interest to my initial investment and then subtract the cash price to get to my investment balance.

Year Dues Cash Price Investment Balance
2012. 675.20. 2,989. 13,226
2013. 696.81. 3,085. 11,534
2014. 719.10. 3,183. 9,683
2015. 742.12. 3,285. 7,661
2016. 765.86. 3,390. 5,457
2017. 790.37. 3,499. 3,061
2018. 815.66. 3,611. 499

If you are planning on going to WDW every year and staying at a deluxe resort it is a good "investment". I actually plan on using mine every other year. Compared to the tower room at the Contemporary at a 25% discount my break even is 15 years. With 320 points to play with every other year I will be staying in 1br or 2br villas most stays and/or adding extra nights so it is well worth the 15 year break even for the upgraded rooms. When I hit my breakeven there will be over 30 years left on my contract. Most resorts with 30 years left (2042 expire dates) sell resale for in the $60+ per point range. Assuming I decided to sell then for around $60 a point I would clear close to $9,000 after paying a sales commission. So I got to stay at upgraded accommodations for the same price as a studio for 15 years and then I get $9,000 back at the end. That seems like a pretty good investment to me and that is not including any other discounts or perks of membership.

 

[ELMC]

The break even point can be calculated. I set up a spreadsheet. I was buying into BLT for 160 points at $94 on the resale market. Total "investment" of $15,540 after closing costs. I assumed the maint fees would go up 3.2% per year (which is the historic average for all DVC resorts). I also assumed room rates would go up the same 3.2% per year. In order to calculate the break even I assumed that if I put the $15,540 in the bank and earned 5% interest then paid cash for my WDW vacations how long would it take for that $15,540 to reach $0. For the cash rate I took the rack room rate for 1 week in a lake view tower room at the contemporary during regular season plus the 12.5% tax less a 25% discount assuming you could get either a room discount or free dining. Based on that I got to $2,989 for the week for that room. The breakeven point is 7 years. This means after your 7th trip you start saving money. If you compare it to a garden wing contemporary room during value season with 25% discount (cheapest room rate at the resort) it takes 12 years. Comparing to rack room rates at Caribbean Beach it's about 22 years. There is no break even for the value resorts Here is an example. Each year I add the maintenance fees plus the interest to my initial investment and then subtract the cash price to get to my investment balance.

Year Dues Cash Price Investment Balance
2012. 675.20. 2,989. 13,226
2013. 696.81. 3,085. 11,534
2014. 719.10. 3,183. 9,683
2015. 742.12. 3,285. 7,661
2016. 765.86. 3,390. 5,457
2017. 790.37. 3,499. 3,061
2018. 815.66. 3,611. 499

If you are planning on going to WDW every year and staying at a deluxe resort it is a good "investment". I actually plan on using mine every other year. Compared to the tower room at the Contemporary at a 25% discount my break even is 15 years. With 320 points to play with every other year I will be staying in 1br or 2br villas most stays and/or adding extra nights so it is well worth the 15 year break even for the upgraded rooms. When I hit my breakeven there will be over 30 years left on my contract. Most resorts with 30 years left (2042 expire dates) sell resale for in the $60+ per point range. Assuming I decided to sell then for around $60 a point I would clear close to $9,000 after paying a sales commission. So I got to stay at upgraded accommodations for the same price as a studio for 15 years and then I get $9,000 back at the end. That seems like a pretty good investment to me and that is not including any other discounts or perks of membership.

Nice analysis. One thing you forgot to include which swings the numbers in your favor is the fact that DVC Villas have a full kitchen whereas the Contemporary hotel rooms do not. So there is more value there. I wonder what your analysis would turn out if you ran the same calculations but instead of booking a room at the Contemporary you "rented" points from a member at $12 each. What would your break even numbers look like using that alternative?

 

[Goofgoof]

Nice analysis. One thing you forgot to include which swings the numbers in your favor is the fact that DVC Villas have a full kitchen whereas the Contemporary hotel rooms do not. So there is more value there. I wonder what your analysis would turn out if you ran the same calculations but instead of booking a room at the Contemporary you "rented" points from a member at $12 each. What would your break even numbers look like using that alternative?

If you rented 160 points each year at $12 and the $12 went up at the same 3.2% per year you would have a break even of 15 years. However, there is limited history to understand how much the rental points will go up in price so it is a little harder to calculate. I suspect they would not go up as much, but I have no evidence to support that. You also probably would not need 160 each year so you could potentially rent less points if available. This would push the break even further out. You would also lose out on member benefits like AP discounts and TIW membership, but you would have a lot more flexibility to walk away or skip a year.

 

[SpaceMountain77]

I am a "number-cruncher" and calculated numerous scenarios before becoming a member. The savings really comes down to three things: (1) your home resort's selling price at the time of purchase, (2) the number of points purchased, and (3) annual dues.

At one point, during 2009, Bay Lake Tower was being sold for $90 a point; in a few weeks, the cost will be $165 a point. The difference between a 150 point contract then ($13,500) and now ($24,750) is $11,250. Personally, I just could not bring myself to buy into Bay Lake Tower at this price point. I love having access to the monorail and thoroughly enjoy seeing it pass through the lobby of the Contemporary, but it is not worth $11,250 to me.

Total points and annual dues is another issue. If your Villas at Disney's Wilderness Lodge contract is for 176 points (one full week at Christmas), then your current annual dues are $987.36 (176 points x $5.61).

I find that smaller contracts for deluxe studio stays are more likely to result in a small to decent savings over time. I could not find a scenario where the 1-bedroom villas resulted in anything other than costing more over time. Unless you are doing a lot of cooking in the kitchen to save on dining, points for these rooms seem to net a loss.

 

[peabody58]

.... In order to calculate the break even I assumed that if I put the $15,540 in the bank and earned 5% interest ....

Dang .... I'd love to know what bank you're using!! 0.25% - 1.5% is about the best you're going get.

 

[ELMC]

I am a "number-cruncher" and calculated numerous scenarios before becoming a member. The savings really comes down to three things: (1) your home resort's selling price at the time of purchase, (2) the number of points purchased, and (3) annual dues.

At one point, during 2009, Bay Lake Tower was being sold for $90 a point; in a few weeks, the cost will be $165 a point. The difference between a 150 point contract then ($13,500) and now ($24,750) is $11,250. Personally, I just could not bring myself to buy into Bay Lake Tower at this price point. I love having access to the monorail and thoroughly enjoy seeing it pass through the lobby of the Contemporary, but it is not worth $11,250 to me.

Total points and annual dues is another issue. If your Villas at Disney's Wilderness Lodge contract is for 176 points (one full week at Christmas), then your current annual dues are $987.36 (176 points x $5.61).

I find that smaller contracts for deluxe studio stays are more likely to result in a small to decent savings over time. I could not find a scenario where the 1-bedroom villas resulted in anything other than costing more over time. Unless you are doing a lot of cooking in the kitchen to save on dining, points for these rooms seem to net a loss.

One of the things to think about with the one bedroom is that if you have little kids, it allows you to put them to bed and still be able to have the adults stay awake, watch tv, eat, etc. without disturbing them. We typically book 1BR suites no matter where we stay, DVC or otherwise.

 

[Goofgoof]

Dang .... I'd love to know what bank you're using!! 0.25% - 1.5% is about the best you're going get.

I hear you. I was trying to be conservative in my analysis. Straight up bank account of even CDs won't get you close to 5% and that is before taxes. You would have to pay tax on your interest earnings too. Maybe if you are smart or really lucky you could invest in mutual funds or stocks and get that kind of return, but it's a gamble and you would be paying capital gains tax too.

 

[Goofgoof]

One of the things to think about with the one bedroom is that if you have little kids, it allows you to put them to bed and still be able to have the adults stay awake, watch tv, eat, etc. without disturbing them. We typically book 1BR suites no matter where we stay, DVC or otherwise.

Great point. We did a 1 br at BLT a few weeks ago. We have a 2 year old and a 5 year old. It was great to put them to bed in the living room, grab a few beers from the fridge and head out to the balcony off the MBR to watch the fireworks. The room even came with a pack n play portable crib and the 5 year old loved the pull out chair. Really great compared to a studio hotel room. When they get older we may want to switch to the studio but stay longer since we will spend less time in the room, but I am going to have a hard time giving up that MBR.

 

[DougEMG]

The break even point can be calculated. I set up a spreadsheet. I was buying into BLT for 160 points at $94 on the resale market. Total "investment" of $15,540 after closing costs. I assumed the maint fees would go up 3.2% per year (which is the historic average for all DVC resorts). I also assumed room rates would go up the same 3.2% per year. In order to calculate the break even I assumed that if I put the $15,540 in the bank and earned 5% interest then paid cash for my WDW vacations how long would it take for that $15,540 to reach $0. For the cash rate I took the rack room rate for 1 week in a lake view tower room at the contemporary during regular season plus the 12.5% tax less a 25% discount assuming you could get either a room discount or free dining. Based on that I got to $2,989 for the week for that room. The breakeven point is 7 years. This means after your 7th trip you start saving money. If you compare it to a garden wing contemporary room during value season with 25% discount (cheapest room rate at the resort) it takes 12 years. Comparing to rack room rates at Caribbean Beach it's about 22 years. There is no break even for the value resorts Here is an example. Each year I add the maintenance fees plus the interest to my initial investment and then subtract the cash price to get to my investment balance.

Year Dues Cash Price Investment Balance
2012. 675.20. 2,989. 13,226
2013. 696.81. 3,085. 11,534
2014. 719.10. 3,183. 9,683
2015. 742.12. 3,285. 7,661
2016. 765.86. 3,390. 5,457
2017. 790.37. 3,499. 3,061
2018. 815.66. 3,611. 499

If you are planning on going to WDW every year and staying at a deluxe resort it is a good "investment". I actually plan on using mine every other year. Compared to the tower room at the Contemporary at a 25% discount my break even is 15 years. With 320 points to play with every other year I will be staying in 1br or 2br villas most stays and/or adding extra nights so it is well worth the 15 year break even for the upgraded rooms. When I hit my breakeven there will be over 30 years left on my contract. Most resorts with 30 years left (2042 expire dates) sell resale for in the $60+ per point range. Assuming I decided to sell then for around $60 a point I would clear close to $9,000 after paying a sales commission. So I got to stay at upgraded accommodations for the same price as a studio for 15 years and then I get $9,000 back at the end. That seems like a pretty good investment to me and that is not including any other discounts or perks of membership.

Your analysis sounds very similar to what I did. So I'm not surprised we got similar results for when the break even point is.

The key thing for people is to compare their DVC to what they would have spent to see if there are any savings.

 

[CarolMN]

Based on what I've read on the DIS over that past upteen years, very few people actually save money buying DVC. That's because they do not travel the way they anticipated when they ran the numbers (if they ran numbers, lol).

After DVC, they go more often, stay longer, stay in larger villas than originally planned, cruise or stay at non-DVC resorts, and invite family and friends to accompany them without charging for the lodging. None of those things are bad, but they are not a recipe for saving money!

 

[Goofgoof]

Based on what I've read on the DIS over that past upteen years, very few people actually save money buying DVC. That's because they do not travel the way they anticipated when they ran the numbers (if they ran numbers, lol).

After DVC, they go more often, stay longer, stay in larger villas than originally planned, cruise or stay at non-DVC resorts, and invite family and friends to accompany them without charging for the lodging. None of those things are bad, but they are not a recipe for saving money!

Guilty as charged. We are already planning our next trip with another couple in a 2 br who we will not be charging. Other years we will probably try to extend to 9 or 10 nights based on time of year and points required. That means 2 or 3 more days of meals, park tickets and spending money. Of course with the kitchen you can save some on food and drinks. In the end we will be spending more total dollars at WDW then if we didn't buy in, but with an uptick in quality. Off topic: I love the dancing banana. I think I am going to start adding that to all my posts.

 

[SpaceMountain77]

Yes, I agree with the previous post and suspect that, over time, DVC members spend more than non-members.

First, you purchase your membership. Shortly after, your buying annual passes, signing up for Tables in Wonderland, etc. Before you know it, you realize that you bought too few points and you are adding on to your contract.

A colleague of mine is a DVC member. Her father became obsessed with the Old Key West and Boardwalk Villas point charts. He accumulated over 1,000 points because he wanted to vacation anytime of the year with all villas types as a possibility.