Keep in mind that the exchange isn't bound to come down. Currency exchange is not the stock market where over the long term it will average out. Nothing says it won't remain at 35% or even go to 50 -60%I have 3 contracts and am financing all of them via Monera. I'm Canadian and our currency is discounted at around 65%. To be honest, I'm waiting on the US market to decline and our currency to rise to former rates (85% > greater), and then I will pay off the loans in full. Right now, financing at 10% interest makes more sense to me than potentially losing 35% on a currency exchange.
DVC isn't going anywhere, but I'm not sure I'd be adding on right now. Not trying to be a debbie downer, but I think the economic run we've been on is coming to an end and I'd be hesitant to load up on any debt for a luxury purchase like a dvc timeshare. Besides, prices might get more attractive...
I really don't get the "don't finance" philosophy.
Anyone who bought into DVC several years ago and held onto their points, whether or not they financed, is looking very smart indeed at this point. Obtaining financing to purchase an appreciating asset that you can use for vacations and easily rent out the points for income as an alternative, and pass on to your children, is a very rational thing to do if you otherwise woule not be able to buy the points.
Financing at a high interest rate is very likely to lead you to spend more over the life of the contract than simply booking rooms at cash prices.
DVC isn't really an "appreciating" asset.
I really don't get the "don't finance" philosophy. Anyone who bought into DVC several years ago and held onto their points, whether or not they financed, is looking very smart indeed at this point. Obtaining financing to purchase an appreciating asset that you can use for vacations and easily rent out the points for income as an alternative, and pass on to your children, is a very rational thing to do if you otherwise woule not be able to buy the points.
Excellent point my friend. Thank you so much for that great example.Yes, this is true, and if we really know DVC will continue to appreciate so much, than yeah, I would say go ahead and finance, that makes prudent sense. I don't mean don't finance under any circumstances / don't finance at all. In the case of the Canadian vs. American dollar, it makes sense. In the case of paying off in 3 months to 2 years, it can make sense. But if financing is for 10 years at high interest rates, that's another story.
Just like the stock market, "Past performance is no guarantee of future results". Yes, DVC double, triple, or even quadruple from the 1990's, 2000's, and 2010's from about $50 per point to about $100 per point to about $200 per point or greater. I can't see DVC doubling / tripling from here, because that would mean $400 to $600 per points, and with only about 20 years left on some of the most desirable DVC resorts, there's not much time left for it to appreciate before value drop down to near $zeo value due to expiration of the deed.
But, of course, as stated, financing is a very personal decision, and if it makes prudent sense for your family, than by all means, do what is best for your family. It's just money after all, so long as you get the many years of enjoyment and fond family memories out of it. But if it causes financial stress, it's a red flag.
Great3
Keep in mind that the exchange isn't bound to come down. Currency exchange is not the stock market where over the long term it will average out. Nothing says it won't remain at 35% or even go to 50 -60%
Me tooTo be honest, I'm hoping the rumored upcoming recession has the same effects the last one did, where currency will be at par or at least a bit better than it is now. It seems to be climbing slowly, so I am holding out hope!