Breaking Even

I just bought. 175 points @ $176 + 50 years worth of dues puts my all in @ $85,800.

I did the math like someone else. 1 trip a year for a deluxe @ rack rates - 25% puts my "break even" $85,800 spend on rooms alone about 20 years out. However, there are times when we have done 2 trips a year before DVC. Now that we are member we will get back to that. So 20 years becomes 15 or 10. But all that assumes I will keep my contract for 50 years. If I decide to sell in 20 years, all the sudden my break even point was only at year 7.

How long will it take you to spend $85,800 in room fees alone. that is your break even point from that point of view.

To me, i dont count the dues. i waste $1,100 a year on other things that if i just tighten m belt a little I make that back. So i look for break even at $30k
 
For most people buying into DVC, the intent of "saving money" or "breaking even" is a proposition made possible only by way of Mickey Math.

If you plan to use your DVC points to actually travel to disney every year, an honest "savings" calculation would take into account the average dollar amount you spent per year over the past five years on WDW trips. That's the "spend rate" you should be comparing a DVC cost to; certainly not a CRO rate, discounted or otherwise. I would even argue comparing it to renting points is misleading.

Looking historically at your WDW trips gives you an accurate sense for how much you actually could save.

If you're a family that has bought annual passes and has gone to Disney every year (multiple times, maybe?) for the last 5 years. Great, DVC may save you money.

If you've been renting points every year for the past five years to stay in deluxe resorts, fantastic! Buying into DVC could save you money, too.

But if you're like most people, you'll spend the next several years traveling much more than you ever would have otherwise to see a fake castle... and if you can honestly afford it, you're going to love it.

You're not going to look back and regret the money you locked into the contract, the MFs that hit you this time every year, the 6:45, 5:45, 4:45, 3:45 wakeup to book fastpasses, the countless hours you spend stalking the RAT, or the endless discussions you'll have with your partner about how you need more points.

You may even find yourself arguing how buying more points could save you even more money, courtesy of Mickey Math.


I don't know if I will ever even try to see when I will break even. I didn't necessarily buy in to "save money" as it's already cost me about 5k more than I was planning on spending on Disney in 2018, with more to come...

But, I know I'm going to travel and enjoy myself more than I would have without buying in, and I'm "forcing" myself to go on a vacation with the kids while they still think it's fun to be around Dad....and, we will be staying at Polynesian for a week next December. No way in hell I would have paid the money to do the cash rate at the Poly. OKW 1 BR was pushing it...so, I guess I don't care if I "save" money.

It "saves" me money the same way a Sam's Club Membership does.
 
50 years of dues starting at $7.26 on 175 points is going to run you closer to $225,000.00 all in.

no. Your math is all wrong some place.

Dues = $7.26 x 175 = $1270.50 x 50 = $63,525
Purchase = 175 x $176 = $30,800 varies by closing cost and incentives

Total $94,325
 


I've never been able to make the math work out in my favor, especially when accounting for maintenance fees and whatever else you have to pay annually on top your inital buy-in. so I have decided it isn't a worthwhile investment.

But I'm a cheapie who stays off site in a very nice pool home or wyndham bonnet creek for $100/night and enjoy every minute of it.
 
Increase your dues 4% per year and don't forget 50 years of expensive Disney vacations, travel, food, tickets, stuff, extras. Our 200 BCV contracts will cause us to spend $300,000 for the life of the contract.

:earsboy: Bill

 
no. Your math is all wrong some place.

Dues = $7.26 x 175 = $1270.50 x 50 = $63,525
Purchase = 175 x $176 = $30,800 varies by closing cost and incentives

Total $94,325
Your MF doesn't stay $7.26, unfortunately. Each year, taxes, administration costs, housekeeping, insurance, etc. all go up.

Assuming an increase of 4% annually on maintenance fees (based on historical data), by 2067, your MF will be $47.70 per point, or $8,347.86 for 175... assuming you don't add on at the new Epcot entryway resort because suddenly you HAVE TO be able to book F&W in October (in November) for the following year.
 


For most people buying into DVC, the intent of "saving money" or "breaking even" is a proposition made possible only by way of Mickey Math.

If you plan to use your DVC points to actually travel to disney every year, an honest "savings" calculation would take into account the average dollar amount you spent per year over the past five years on WDW trips. That's the "spend rate" you should be comparing a DVC cost to; certainly not a CRO rate, discounted or otherwise. I would even argue comparing it to renting points is misleading.

Looking historically at your WDW trips gives you an accurate sense for how much you actually could save.

If you're a family that has bought annual passes and has gone to Disney every year (multiple times, maybe?) for the last 5 years. Great, DVC may save you money.

If you've been renting points every year for the past five years to stay in deluxe resorts, fantastic! Buying into DVC could save you money, too.

But if you're like most people, you'll spend the next several years traveling much more than you ever would have otherwise to see a fake castle... and if you can honestly afford it, you're going to love it.

You're not going to look back and regret the money you locked into the contract, the MFs that hit you this time every year, the 6:45, 5:45, 4:45, 3:45 wakeup to book fastpasses, the countless hours you spend stalking the RAT, or the endless discussions you'll have with your partner about how you need more points.

You may even find yourself arguing how buying more points could save you even more money, courtesy of Mickey Math.

We're one of those families that was already going to Disney 1-2x a year for several years, staying at Deluxe resorts on cash (many times with runDisney room discounts), and buying annual passes. DVC will essentially allow us to stay in bigger/nicer rooms for more days compared to what we were already doing/spending - should have looked into it years ago! We might try to calculate break-even for fun, but we're not too concerned about when it happens since we paid cash for our contracts and don't plan on selling them (we love Disney regardless of whether we had kids - now that we do, it's even better!).
 
Your MF doesn't stay $7.26, unfortunately. Each year, taxes, administration costs, housekeeping, insurance, etc. all go up.

Assuming an increase of 4% annually on maintenance fees (based on historical data), by 2067, your MF will be $47.70 per point, or $8,347.86 for 175... assuming you don't add on at the new Epcot entryway resort because suddenly you HAVE TO be able to book F&W in October (in November) for the following year.

I think @DSLRuser understands all that -- but you're making a calculation that includes both today's and tomorrow's dollars. he's likely making the assumption that the dues, when taking into account inflation, stay about the same...so even if dues go up 3% every year, that is at least mostly offset by the fact that a dollar today is worth more than a dollar tomorrow. In short, yes -- in 50 years, MFs could be $47 a point -- however, that is in 2067 dollars...not 2018 dollars. $47 in 2067 will feel like $8 today. (e.g., a gallon of milk will likely cost $30 or more in 50 years)

While his calculation is not perfect -- it is a fairly accurate guesstimate.
 
Your MF doesn't stay $7.26, unfortunately. Each year, taxes, administration costs, housekeeping, insurance, etc. all go up.

Assuming an increase of 4% annually on maintenance fees (based on historical data), by 2067, your MF will be $47.70 per point, or $8,347.86 for 175... assuming you don't add on at the new Epcot entryway resort because suddenly you HAVE TO be able to book F&W in October (in November) for the following year.

I will bet you a BILLION dollars MF will not be any place close to $40 a point. At some point there will be a max where EVERYONE would bail and get rid of points.

but that was good for a nice laugh.
 
From my scenario our break even will be approximately 5-6 years. Where you are starting from will make a big difference. We bought resale at just around $80 pp for AKL - with one upcoming trip this year April using banked and borrowed points, a December trip and our next trip planned in 2020 - we will break even by then. This is why you can not just look at number of trips because each trip is different - we saved points this year to book a 2 BR to include the in laws. December is in a studio with just one kid. Then a year off and 2020 will bring a trip with all 3 kids.

I figure out a comparable cost so when i book i will generally look at what booking a direct Disney room would be - so for our upcoming April poly and 2 BR AKV trip - through disney it would have cost close to 9K - just a hair under what we initially bought our contract for. The increase to our initial buy in is the yearly MF, but generally what we pay yearly is much, much less than what a room at disney would be. Like others have mentioned there are other situations - what if you can get a 25% off deal, what if you were to rent points (this will stretch out your break even a bit). It is more of a curiosity thing than anything else.

At any rate it costs less to buy into DVC (with certainly a better savings with resale - well it used to be) so over the long term it will save you money if this is they way you plan on traveling for the next 10-15 years. Buy for what makes sense for your family and your vacation needs. We bought for every other year use- but after this April trip of course we had some extra points so we had to book something to see the holiday decorations, but that is it until 2020. It will be tough to stay away but we will be focusing on other trips to explore the great US. So we will have a great balance of WDW and other great vacations in between.

Right now DVC resale is a pretty safe investment because even if you were to use it for a few years and then decided it was not for you - you would be able to sell and when you factor in your trips taken -- you will not be losing really much of anything. Now if the economy tanks -- that will be another story, but right now it is a very sound purchase.
 
I see a few comments mention that you don't "save" money with DVC because in the end you spend more, so it's clear we are not all using the same definition of "save". I really don't think those asking about savings are really asking about how to reduce their overall total spending on everything under the sun, as thats obvious (spend less money, don't go to disney, etc), but rather the relative cost comparison between two options for something they have already committed to. Regardless of what you do with your savings, its still savings.
 
Your MF doesn't stay $7.26, unfortunately. Each year, taxes, administration costs, housekeeping, insurance, etc. all go up.

Assuming an increase of 4% annually on maintenance fees (based on historical data), by 2067, your MF will be $47.70 per point, or $8,347.86 for 175... assuming you don't add on at the new Epcot entryway resort because suddenly you HAVE TO be able to book F&W in October (in November) for the following year.
So, what’s that in today’s dollars? Discount that to present value.
 
So, what’s that in today’s dollars? Discount that to present value.
In 1991, OKW MF was $2.51. In today's dollars, that's $4.60, based on historical inflation rates.

Today, OKW is $6.72. MF's are outpacing inflation. Cost is not just going up with the cost of the dollar, unfortunately.
 
You really need to ignore the “we take twice as many trips so our break even is cut in half” comments. You need to calculate based on the number of points and the comparable number of days of lodging.

One thing that’s frequently missing from calculations is the current value of the asset. Sure, lots of people plan to own for the duration when the contract expires, but it still has some value at 10 or so years along the way.

I bought in about four years ago. The value of my contracts have increased to the point that, my buy-in plus all the maintenance fees are less than the current value if I sold today. So I guess all my trips have been free.
 
In 1991, OKW MF was $2.51. In today's dollars, that's $4.60, based on historical inflation rates.

Today, OKW is $6.72. MF's are outpacing inflation. Cost is not just going up with the cost of the dollar, unfortunately.
So? Use the historical rate of increases to calculate the future maintenance fees. And use that same number to discount them to present value. They cancel out, and the original figure stands.
 
I'm not sure about a break even scenario. It's so hard to compare apples to apples when you end up changing your travel habits after buying in. We were a twice a year +moderate hotel+off-site rental family that turned into 3 or 4 trips a year +deluxe +1-2 bedroom family.

Trying to do the math on it is kind of like statistics. You can always tweak a number or run it somehow to where you end up thinking 'Disney is basically paying me to own into dvc!'. Well maybe not quite but you get the idea.

Have we spent more on Disney vacations since owning in? Heck yes. But we have also made some darn good memories, been able to invite family and friends who otherwise wouldn't stay deluxe, and had fun at members only DVC nights and using other perks. And the level of giddy I get *every time * I log into my account is worth it. Very few things in life make me as happy as DVC. That's worth a whole lotta something.

You basically need to ask yourself "does Disney make me stupid happy?" and "can I afford it?". The fake numbers on a spreadsheet are just justification. Not saying I didn't run things through a spreadsheet before we bought but now I'm able to see what a moot point it was.
 
So? Use the historical rate of increases to calculate the future maintenance fees. And use that same number to discount them to present value. They cancel out, and the original figure stands.
At an inflation rate of 2.5%, $8,347 in 2068, would be the equivalent of $2,400.00 today.
 
I just bought. 175 points @ $176 + 50 years worth of dues puts my all in @ $85,800.
Your math really surprised me. Your buy in was ~ $30,800. You are making an assumptioon that your MF are a constant for the next 50 years. You would need to factor in - increasing yearly dues to get a close estimate. So figure even this year at $6.5 MF per point would be $1137.5 then next year a conservative increase would be 3% (they can go as high as 15%) so $1171.63 and so on. It is the compounding increases in MF that will add up. It is those increasing MF which end up being a larger part of the purchase. Still likely less than if you were to take yearly trips without DVC.

There are some on here who have spreadsheets to calculate/forecast the MF.

To keep track I just use a simple spreadsheet starting off with our initial buy in, adding in yearly MF and deducting what each of our trips would have likely cost through Disney. It is a rough estimate but gets you pretty close to knowing your break even.
 

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