I've seen many analysis on what it costs for a Disney Point and I think that the calculations have been too low. The cost of a point depends on three things.
1. Depreciation 2. Time Cost of Money 3. Yearly dues.
If you buy points at $200 per point and they are for 50 years, the depreciation is $4 per year. If the annual dues are $9 per point, that is an additional cost per point per year. Then add the time cost of money. If it is 5% then the time cost of $200 per point is 5% of $200 or $10 per point per year. That comes out to $23 per point per year. You'll be able to see that some of the DVC vacations at Disney Resorts are costing you more than you think, and using them for Disney Cruises is a very bad deal, however, some are a very good deal. For example if you can get a studio for 10 points, it is costing you $230 per night when Disney may be charging $400 for the same room. Also in the calculation is that the annual dues will increase yearly slower than the hotel room price will. So over time, the savings between the cost with points and Disney price will improve
Now I bought my points at $50 per point, paid $2 per point in dues when I first joined so my costs are significantly less. But new purchases cost significantly more. For you to determine what a Disney point costs you need to know of few numbers. 1. What did you pay per point? 2. What do you consider your time cost of money (If you were able to borrow the money then it is the interest rate. If you put your money in a savings account it is your interest rate. If you invest, it is your investment return rate) 3. How many years on your contract 4. What are your yearly dues per point. So to calculate your cost you would
Cost per point divided by number of years on your contract, plus cost per point times time cost of money plus yearly dues.
There are two variables that this calculation does not include 1. This formula holds true if you hold on to your Disney points till they expire. DVC is the only time share that I have ever seen that has actually increased in value. This is strange because the number of years left on the contract decline each year. So if you sell you DVC membership before it expires, you subtract the sale price per point from the cost of your Disney point. So if your $200 per point payment now is still worth $200 per point 20 years from now and then you sell, you can subtract the depreciation cost from the cost per point. 2. No one can predict what the yearly increase in dues are. So the cost per point will go up every year But this will certainly be less than the increase in prices that Disney charges for the rooms. The biggest variable in the equation is what you consider your time cost of money is. But nevertheless, if you rent your points for $12 per point, you are giving them away.
1. Depreciation 2. Time Cost of Money 3. Yearly dues.
If you buy points at $200 per point and they are for 50 years, the depreciation is $4 per year. If the annual dues are $9 per point, that is an additional cost per point per year. Then add the time cost of money. If it is 5% then the time cost of $200 per point is 5% of $200 or $10 per point per year. That comes out to $23 per point per year. You'll be able to see that some of the DVC vacations at Disney Resorts are costing you more than you think, and using them for Disney Cruises is a very bad deal, however, some are a very good deal. For example if you can get a studio for 10 points, it is costing you $230 per night when Disney may be charging $400 for the same room. Also in the calculation is that the annual dues will increase yearly slower than the hotel room price will. So over time, the savings between the cost with points and Disney price will improve
Now I bought my points at $50 per point, paid $2 per point in dues when I first joined so my costs are significantly less. But new purchases cost significantly more. For you to determine what a Disney point costs you need to know of few numbers. 1. What did you pay per point? 2. What do you consider your time cost of money (If you were able to borrow the money then it is the interest rate. If you put your money in a savings account it is your interest rate. If you invest, it is your investment return rate) 3. How many years on your contract 4. What are your yearly dues per point. So to calculate your cost you would
Cost per point divided by number of years on your contract, plus cost per point times time cost of money plus yearly dues.
There are two variables that this calculation does not include 1. This formula holds true if you hold on to your Disney points till they expire. DVC is the only time share that I have ever seen that has actually increased in value. This is strange because the number of years left on the contract decline each year. So if you sell you DVC membership before it expires, you subtract the sale price per point from the cost of your Disney point. So if your $200 per point payment now is still worth $200 per point 20 years from now and then you sell, you can subtract the depreciation cost from the cost per point. 2. No one can predict what the yearly increase in dues are. So the cost per point will go up every year But this will certainly be less than the increase in prices that Disney charges for the rooms. The biggest variable in the equation is what you consider your time cost of money is. But nevertheless, if you rent your points for $12 per point, you are giving them away.
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