# Does Marriott negotiate?



## Troopers (Jul 31, 2007)

I'm considering to purchase a 2 bdrm l/o at the Ko Olina resort directly from Marriott.  I understand the potential savings (~$10k) from resale but the ability to trade the week for Marriott points is important to me.  Does anyone know if Marriott will negotiate?  If so, what components of the purchase is negotiable?  Price?  Incentives?  Points?  Bonus weeks?  Anything else?  I am communicating with a sales excutive that has provided with lots of pricing and other info.  Just curious if I'm wasting my energy negotiating.

Thanks.


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## Dave M (Jul 31, 2007)

Marriott doesn't negotiate on price. Period.

As for other items, you can try, but you'll almost always get Marriott's best offer the first time. The salesperson wants to make a sale.

If you put that $10K savings in the stock market, you'll probably earn enough to equal the value of the points you could get for trading the use of your week _and_ you'll still be able to use your week!


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## Troopers (Jul 31, 2007)

Dave M said:


> Marriott doesn't negotiate on price. Period.
> 
> As for other items, you can try, but you'll almost always get Marriott's best offer the first time. The salesperson wants to make a sale.
> 
> If you put that $10K savings in the stock market, you'll probably earn enough to equal the value of the points you could get for trading the use of your week _and_ you'll still be able to use your week!



Thanks.  Do you know if I'm better off purchasing onsite or through the direct sales number in Florida?


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## Dave M (Jul 31, 2007)

R Chen said:


> Thanks.  Do you know if I'm better off purchasing onsite or through the direct sales number in Florida?


Normally the offers will be the same. The price will definitely be the same. I have heard of a few situations where Telesales was able to offer a slightly better deal (with incentives) than what was available onsite.


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## PerryM (Aug 1, 2007)

*Compounding - a little goes a long way...*

I normally recommend that 1st time timeshare buyers buy from the developer and have the developer hold your hand.  However, you stumbled on TUG and thus you can accurately value the ability to turn in your 2BR for Marriott Reward Points.

The decision is $10,000 or the ability to not vacation in your timeshare but perhaps elsewhere.  If you do buy from Marriott how often do you think you will turn in your vacation?  Once every __ years (you fill in the blank)  How many MRPs do you get and what can you do with them.

If instead, you place the $10,000 in a special stock account and buy one stock DIA (AMEX; Diamond trust of the DJIA) you will average 13.16% per year for the rest of your life – that’s what the DJIA has averaged since 1933 per year.

10 years from now that $10,000 is worth $34,429
20 years from now that $10,000 is worth $118,538
30 years from now that $10,000 is worth $408,120

So the question is 20 years from now – how many vacations will you turn in for MRPs and are they worth $118,538 for the privilege.  If the answer is yes, then I’d do it, if the answer is no, then don’t.

Starting in 2008 you can put $5,000 into your Roth IRA per year.  If you did that for 30 years you would contribute 30 * $5,000 = $150,000 (you do have to pay the tax on this) and the Roth is worth $1,716,675 – totally tax free.

If you’ve paid your max into an IRA or Roth then that $10k could be sent to Marriott instead of your stock account.

Good luck,


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## bobcat (Aug 1, 2007)

PerryM said:


> I normally recommend that 1st time timeshare buyers buy from the developer and have the developer hold your hand.  However, you stumbled on TUG and thus you can accurately value the ability to turn in your 2BR for Marriott Reward Points.
> 
> The decision is $10,000 or the ability to not vacation in your timeshare but perhaps elsewhere.  If you do buy from Marriott how often do you think you will turn in your vacation?  Once every __ years (you fill in the blank)  How many MRPs do you get and what can you do with them.
> 
> ...



Perry gave you great info and it was free.


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## Jimbo (Aug 1, 2007)

R Chen said:


> I'm considering to purchase a 2 bdrm l/o at the Ko Olina resort directly from Marriott.  I understand the potential savings (~$10k) from resale but the ability to trade the week for Marriott points is important to me.  Does anyone know if Marriott will negotiate?  If so, what components of the purchase is negotiable?  Price?  Incentives?  Points?  Bonus weeks?  Anything else?  I am communicating with a sales excutive that has provided with lots of pricing and other info.  Just curious if I'm wasting my energy negotiating.
> 
> Thanks.



About 8 years ago I was considering the same thing and was a points junkie.  I thought that the best thing since sliced bread was MRP and the ability to exchange my Marriott TS for points.  I purchased an EOY in Hawaii and in the 4 times that I could have gotten points I only did it once.  I would have gladly saved the $5K (difference 'tween developer and resale) if I would have known then what I know now.

Plain and simple, in my book it is not worth it.  Now, if you are building a portfolio of Marriott properties and can't use enough of them each year, then by all means (and after considering Perry's advice) buy retail.

Whenever you buy and from whomever you buy, you will enjoy your Marriott TS.  I just exchanged into HHI, SC for the middle of Aug 2007.  We leave in 11 days and I can't wait!!!


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## Zac495 (Aug 1, 2007)

PerryM said:


> I normally recommend that 1st time timeshare buyers buy from the developer and have the developer hold your hand.  However, you stumbled on TUG and thus you can accurately value the ability to turn in your 2BR for Marriott Reward Points.
> 
> The decision is $10,000 or the ability to not vacation in your timeshare but perhaps elsewhere.  If you do buy from Marriott how often do you think you will turn in your vacation?  Once every __ years (you fill in the blank)  How many MRPs do you get and what can you do with them.
> 
> ...




Ouch. I still question our developer purchase - which we did knowing all about resale and already knowing about points. We did it because we want to go all over Europe and fly first class, thus, we thought it made sense. Your scenerio makes me think we screwed up. Marriott Aruba - resale - great deal. HGVC - resale - great deal. Marriott Manor Club - devloper - we will use it for points only. Oh well, it's done so we'll enjoy it.


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## PerryM (Aug 1, 2007)

Zac495 said:


> Ouch. I still question our developer purchase - which we did knowing all about resale and already knowing about points. We did it because we want to go all over Europe and fly first class, thus, we thought it made sense. Your scenerio makes me think we screwed up. Marriott Aruba - resale - great deal. HGVC - resale - great deal. Marriott Manor Club - devloper - we will use it for points only. Oh well, it's done so we'll enjoy it.



When I recommend a timeshare for those who ask me I ask if they have taken care of their retirement obligations first - IRAs or programs at work, or just putting some money away for when you reach retirement.

I don't get into all that here, but if you buy a timeshare and haven't taken care of your retirement and family obligations first then you have not done due diligence.

That's why I classify ALL timeshare purchases to be affluent - you have the excess money and just want to buy nice vacations.


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## Troopers (Aug 1, 2007)

PerryM said:


> When I recommend a timeshare for those who ask me I ask if they have taken care of their retirement obligations first - IRAs or programs at work, or just putting some money away for when you reach retirement.
> 
> I don't get into all that here, but if you buy a timeshare and haven't taken care of your retirement and family obligations first then you have not done due diligence.
> 
> That's why I classify ALL timeshare purchases to be affluent - you have the excess money and just want to buy nice vacations.



Thanks Perry for in insight.  Perry, consider this...assume I borrow the entire capital for a retail purchase with a 5.5% HELOC (with no intent to pay down the capital).  If the annual loan payment plus the MF is less than what I would had paid if I rented the rooms, this makes financial sense to me.  My primarily reason to buy retail is because life gets busy and sometime gets in the way.  There may be a year or two in 10 years where it may be difficult to use the TS for one reason or another which results in some financial loss for the TS for that particular year if I didn't have the ability to trade it into points.

I believe a TS is certainly a "luxury" item purchased with disaposable income.  I have been been very fortunate and finacially blessed.  However, I'm still evaluating my options, thus, my title of my post "Does Marriott negotite?"  Thanks everyone for your help...I'm a newbie.


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## JimC (Aug 1, 2007)

There are two additional options beyond use, trade or forgo.

1.  Make the best reservation you can in your season and deposit it into II.  You have two years to use the deposited week.

2.  Rent the week.


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## jme (Aug 1, 2007)

*timeshare purchase*

Same old question, same old answer .....(funny, but first I typed in "sane old answer"....so, excuse the Freudean slip).....

Buying a timeshare is typically done while stumbling upon the resort or the idea....(I did, anyway) ...THEN, after the impulsive purchase, you become so excited that you surf the net and discover TUG, whereupon you see that you COULD HAVE bought resale, blah, blah, blah.....I bought 3 weeks like that, FROM developer, then two more...then discovered TUG. But "way back when", like 10 years ago, Marriott was giving huge incentive points, which got us to Europe twice and other places, and we're still using those same banked points today. 

We've NEVER once, nor would we, trade a week for points...(at least I saw that trap early on) ....it's just too expensive a loss to take....everybody knows that for the 2-BR condo-like t/s week you give up, you get 2/3 value back, and it's a one-room hotel stay at that. NOT a good business decision. Having said that, for the past decade we've adored our weeks, or resort, and the travel we were able to accomplish with our young-adult children....utilizing our timeshare ownership and perks starting at their age of 7 and now it's 18 (using the youngest as the example). So, during their "wonderful" & impressionable young lives, they made fantastic memories, and we wouldn't trade that for anything. 

Now, though, Marriott does not give "JUST compensation" for a trade-for-points transaction, and their whole points system has become devalued (by design) each subsequent year, such that I not only feel, but know, that there's simply no reason to buy from Marriott unless, like Perry says, you have disposable income and wish to treat it as such by quickly disposing of it......I think it's best to let it bleed out slowly, and do that by buying resale.....you get the exact same advantages (same trades, same occupying ability---what else would anybody really NEED?) , and you just forget the points, except to accumulate them by other means, like the credit card rewards. The points system works, but NOT by trading an expensive week for 2/3 value in points.....

On the other hand, just to pat the hand of those who love the developer purchase and the points system game (& I guess it could be exciting to play that points game, with all the hotels available worldwide), if we lived life by "doing the math", we'd all be living in communes and driving Yugo's , waiting on that "stock market investment" to mature IN TEN YEARS. When all is said and done, yes, we could have done better, but we also got in at a great time in our family's life (that was the good point), and our memories are unbelievable....and we reminisce every month already....and we're planning more trips as we speak! For those who discover TUG first, drop to your knees FAST and thank GOD, and listen to the sage advice of those who have gone before....jme


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## Cindala (Aug 1, 2007)

PerryM said:


> If instead, you place the $10,000 in a special stock account and buy one stock DIA (AMEX; Diamond trust of the DJIA) you will average 13.16% per year for the rest of your life – that’s what the DJIA has averaged since 1933 per year.



This return is amazing!  Is there a minimum investment required?


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## thinze3 (Aug 1, 2007)

IMO Ko'Olina is TOO EXPENSIVE to purchase for points!

A few things to look at:

How often and how many MR points does Ko'Olina give?
100,000 MR Points are worth about 1000$.
140,000 points equal one year maintenence fees at Ko'Olina.
These points CANNOT be used to book a Marriott timeshare.
Regular MR Points can be used for a timeshare, 140,000 for a week if available - most Hawaii resorts are not.
The incentive MR points they give you at purchase CAN be used for a timeshare.
Hotels dates are limited on travel with MR Points.
Some airlines are limited on travel with miles.
Ko'Olina can be rented for $2500-$3000/weak.

You see where I am going here?

I bough Marriott Waiohai resale (saved exactly 65%). Waiohai was offering 85,000 MR points every other use.
I recently bought Marriott Legends Edge from the developer. I did that because it was CHEAP, has very low maintenence fees ($760), gives 100K points EVERY use, was part of the Florida Club, and is within one days drive of my home. There's a bit of a difference you see.


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## pspercy (Aug 1, 2007)

Cindala said:


> This return is amazing!  Is there a minimum investment required?



It's an ETF - Exchange Traded Fund, a mutual fund style investment that trades like a stock, in this case it mimics the Dow Jones Industrial Average (an index). So you can open an IRA and buy it, or buy in a regular brokerage account etc. It's a whole world and off topic here so I'll just say read Scott Burns' "Couch potato investing" http://assetbuilder.com/tags/Couch+Potato+Investing/default.aspx

Or Paul Farrell's articles on Marketwatch's Personal Finance: http://tinyurl.com/2e3cvs

Good luck


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## PerryM (Aug 1, 2007)

*How to make a small fortune...*



Cindala said:


> This return is amazing!  Is there a minimum investment required?



I trade stocks for a living - folks always ask me how to make a small fortune in the stock market.

It's very easy - start with a large fortune.  (I don't take credit for this pun that's been around for a long time)

I am aware of NO other investment vehicle that averages 13% return for 73 years - none, zip, zilch.  This is the DJIA. Buy it via the stock DIA and you control your own future - just never sell it until you retire.

The Roth IRA is the best thing going - you put in money each year from your paycheck and that money cooks at 13% (on the average) and when you retire at age 50 or 55 (why wait for 65?) You pull the money out and don't pay a single penny to the politicians in Washington.

That's all you need for your retirement.  DIA and Roth.

If you are 20 years old you need something with at least a 40 year track record - besides the DJIA there might be a few.  Ask for a 70 year track record and there is nothing left - you only have the one choice - the DJIA.



The other thing folks seem to forget is long term health insurance - We bought a 10 year policy in 2000 and 3 more years we stop paying and if we need the long term care it pays about $300 per day for both my wife and I (Grows at 5% per year).  At the end of the 10 year policy we pay not a single penny more.  This is a great insurance policy that I'd encourage everyone to get - there are many out there.

P.S.
This very second the DIA is $131.74 a share and you can buy a single share if you want.  The DJIA is 13,173.40 just take the DJIA and divide by 100 to get the DIA price at any time.


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## gmarine (Aug 1, 2007)

Cindala said:


> This return is amazing!  Is there a minimum investment required?




Dont forget the very important disclaimer. 

Past performance is not a guarrantee of future results.


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## Troopers (Aug 1, 2007)

thinze3 said:


> IMO Ko'Olina is TOO EXPENSIVE to purchase for points!
> 
> A few things to look at:
> 
> ...



thinze3,

I do not think anyone is suggesting buying Ko Olina or any other TS for the points.  I'm evaulating the ~$10k premium (price difference between retail and resale) for the opportunity to trade in a particular year for points.  If I'm like most Tuggers, a TS is a long term (15 yrs +/-) luxury item.  The ability to trade for points for whatever reason is certainly valuable over 15 years +/-.

To come full circle to my post, I do not think the $10k premium is worth the ability to trade for points.  Thus, will Marriott negotiate?  If I am able to lower the price or get some freebies, maybe the premium is reduced to say $7k.  Buying retail is certainly more attractive if it's a $7k premimum.   So, let me throw this question out there...how much savings is needed to buy resale vs retail?

Thanks.


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## Troopers (Aug 1, 2007)

PerryM said:


> I normally recommend that 1st time timeshare buyers buy from the developer and have the developer hold your hand.  However, you stumbled on TUG and thus you can accurately value the ability to turn in your 2BR for Marriott Reward Points.
> 
> The decision is $10,000 or the ability to not vacation in your timeshare but perhaps elsewhere.  If you do buy from Marriott how often do you think you will turn in your vacation?  Once every __ years (you fill in the blank)  How many MRPs do you get and what can you do with them.
> 
> ...




This is generally accurate if one has $10k in the bank and actually invests it as described.  

However, consider looking at the $10k like this...what is the cost of the addtional $10k to buy retail?  Assume one borrow the $30k for a retail @ 6.5% HELOC (this equates to a $1950 annual payment).  The annual MF of $1313 plus the loan payment of $1950 is a total of $3263 (which is roughly $466 per night at the TS).  If this is less than what comparable hotels rates are per night, than it makes financial sense.  If the loan was for $20k for a resale, the total annual cost is $2613 (roughly $373 per night at the TS).  Clearly there is move "savings" by borrowing only $20k vs $30k but in both cases, one is still saving money compared to the hotel rates.


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## Dave M (Aug 1, 2007)

First, at most, any negotiation you can do for additional incentives won't change the net value of what you get or what it costs you by more than a few hundred bucks. So negotiation is not a factor. I apologize if I didn't adequately communicate that in my first post.

Second, as I think has been well demonstrated here, most of us believe that the points option has very little value, especially at a resort where the MFs are so high. Paying $1,312.62 in maintenance fees (2007) plus the $104 trading fee to get points with a value of about $1,000 just doesn't make economic sense. Further, those maintenance fees are going to keep going up (they increased 30% in 2007 over 2006!) and the value of the points, based on Marriott's history of points devaluation, will keep going down, making the economic equation even more unfavorable as the years pass. Accordingly, the longer you own your timeshare, the more _unattractive_ trading for points will become!

One of the alternatives mentioned, renting your week, should be much more lucrative than trading your use for points in a year that you decide you won't use your timeshare. With what you can net from a rental, you can do much better in paying for your travel options than you can by using the Marriott Rewards points you would get for one year's trade for points. You don't have to buy from Marriott for that rental privilege!

Thus, how little would the difference in price have to be to convince me to buy from Marriott? Based on what I have stated in this post and what I know now after owning multiple Marriotts for over ten years, the differential would have to be less than $1,000 for Ko Olina. 

Having said all of that, I definitely believe there are occasionally some good reasons for buying directly from Marriott. An example might be where you have the opportunity to purchase at initial pre-construction prices and feel a need to own at and use a particular resort when it first opens, since there are no resales available. 

Your situation and reasoning doesn’t seem to come close to meeting the smell test for buying from Marriott. I know you are hoping we will say you are making a good choice if you buy this timeshare from Marriott. I don’t think you’ll hear that from experienced Marriott owners.


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## Dave M (Aug 1, 2007)

Adding to my most recent post and using the numbers in your most recent post, it would cost you almost $4,700 to trade a year's use for points worth only about $1,000! Your interest costs, the maintenance fees and the fee to trade for points add up to about that amount. 

Does it make any sense at all to do that versus spending $10,000 less for your purchase and foregoing the points option?

For valid reasons related to the taxability of investments you would choose to leave intact if you chose to borrow, you wisely didn't tax-effect the interest cost stated in your example.


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## Troopers (Aug 1, 2007)

Dave M said:


> First, at most, any negotiation you can do for additional incentives won't change the net value of what you get or what it costs you by more than a few hundred bucks. So negotiation is not a factor. I apologize if I didn't adequately communicate that in my first post.
> 
> Second, as I think has been well demonstrated here, most of us believe that the points option has very little value, especially at a resort where the MFs are so high. Paying $1,312.62 in maintenance fees (2007) plus the $104 trading fee to get points with a value of about $1,000 just doesn't make economic sense. Further, those maintenance fees are going to keep going up (they increased 30% in 2007 over 2006!) and the value of the points, based on Marriott's history of points devaluation, will keep going down, making the economic equation even more unfavorable as the years pass. Accordingly, the longer you own your timeshare, the more _unattractive_ trading for points will become!
> 
> ...



Thanks Dave.  At $10k premium,  I certainly think resale is the way to go.  Darn, about the lack of negotiation.


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## Frisbeeace (Aug 1, 2007)

The thread comes pretty strong against the trade-for-points option, which I've used every year since 1992 so I hope that some of the following makes sense:



PerryM said:


> If instead, you place the $10,000 in a special stock account and buy one stock DIA (AMEX; Diamond trust of the DJIA) you will average 13.16% per year for the rest of your life – that’s what the DJIA has averaged since 1933 per year.





Dave M said:


> First, at most, any negotiation you can do for additional incentives won't change the net value of what you get or what it costs you by more than a few hundred bucks.



I respectfully disagree. Savings are not $10,000 if you deduct the value of the incentive points that you will receive which could be somewhat in between 150,000 and 225,000 per week. That's the only negotiable aspect of your purchase with Marriott. I have just issued 2 business class tickets round-trip to the US using 180,000 MRP for a combined value of $14,000. Even if you only get 150,000 incentive points, it will allow you to stay for a week at a cat.7 hotel in Europe, worth an estimate of $3,500. So, make your numbers again about which are the true savings of your initial purchase and its projected yield in the future.



Jimbo said:


> I purchased an EOY in Hawaii and in the 4 times that I could have gotten points I only did it once.  I would have gladly saved the $5K (difference 'tween developer and resale) if I would have known then what I know now. Plain and simple, in my book it is not worth it.



Pretty obvious. If you plan to get advantage of the trade-for-points option you don't buy EOY and you don't buy in Hawaii where the MFs are so high. You buy EY in Orlando with MFs around $800 per year.



thinze3 said:


> 100,000 MR Points are worth about 1000$.



Most people value 100,000 MRP at least at $1,500 (check Flyertalk). With my 2 weeks I earn 220,000 per year, enough for a week at a cat.6 hotel, taxes incl. (est. $2,500) and 90,000 miles equal to 2 economy round trip tickets to the US or Europe (another $2,500). So, for $1,860 per year I get $5,000 worth in hotel+flights. I therefore value my points at 2.2 cents per 1,000.



Dave M said:


> ... the value of the points, based on Marriott's history of points devaluation, will keep going down, making the economic equation even more unfavorable as the years pass. Accordingly, the longer you own your timeshare, the more unattractive trading for points will become!.



True, this is a real concern for owners in the medium-long term. So far hotel rates have gone up steeply so devaluation has been offset by the savings when you trade point for hotel nights.


Finally, the trade-for-points options saves you from the hassle of interchanging or renting your week if you decide not to occupy. That's a relief for me and my friends that own with Marriott.


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## Troopers (Aug 1, 2007)

Dave M said:


> Adding to my most recent post and using the numbers in your most recent post, it would cost you almost $4,700 to trade a year's use for points worth only about $1,000! Your interest costs, the maintenance fees and the fee to trade for points add up to about that amount.
> 
> Does it make any sense at all to do that versus spending $10,000 less for your purchase and foregoing the points option?
> 
> For valid reasons related to the taxability of investments you would choose to leave intact if you chose to borrow, you wisely didn't tax-effect the interest cost stated in your example.



There's two separate issues as I see it:

1).  the financials of trading a TS week for points and
2).  the cost for the ability to trade for points

Regarding 1). I certainly agree that trading a TS week for points doesn't not make financial sense although some may think otherwise (side note, not sure how you arrived at $4,700 but it doesn't matter).  I'm not interested in purchasing a TS simply to exchange for points annually.  I have every intention to use my TS (if I move forward with it) every year for the next 20+ years.

Regarding 2). There is a benefit for the opportunity to be able to trade for points (regardless of it makes financial sense or not).  If not, why are resales much cheaper than retail?  A major discussing point in favor of TS is its flexibility.  Without the ability to trade points, it is less flexible.  The opportunity cost to trade for points needs to be deducted when discussing the financials of trading a TS week for points.  This opportunity cost is subjective and will differ for each person.

In any case, sounds like I will not be able to negotiate the retail price, so I'm going with resale.


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## jwq387 (Aug 1, 2007)

*marriott timeshare purchase*



PerryM said:


> I normally recommend that 1st time timeshare buyers buy from the developer and have the developer hold your hand.  However, you stumbled on TUG and thus you can accurately value the ability to turn in your 2BR for Marriott Reward Points.
> 
> The decision is $10,000 or the ability to not vacation in your timeshare but perhaps elsewhere.  If you do buy from Marriott how often do you think you will turn in your vacation?  Once every __ years (you fill in the blank)  How many MRPs do you get and what can you do with them.
> 
> ...



If I had been investing since 1933, then yes, I would have averaged 13% per year. HOWEVER, Perry, as you know, we have had two major "trading range "markets the last 75 years that have lasted at least 20 years each, where the market only moved up on an average of 2.5% per year.Therefore, if someone has only 20-25 years left to invest, and we hit one of these "trading range" markets, then 13% per year simply is not going to happen. These markets lasted 20-40 years, and over that period one only averages only about 2.5% apreciation, per year. Just some food for thought, in case some of you get excited about the prospect of "earning 13% per year for the rest of your life."

My apologies. there have been 2 major trading ranges in the DJIA since 1900. The first lasted 41 years, 1900-1941, with the Dow advancing only 1.8% per year. The second, occurred from 1963-1982, with the Dow advancing 2.5% per year. I know this is a discussion of the merits of buying new vs. resale, but we need to understand the history of the DJIA. If you invest in the DJIA for the next 40 years(the rest of your life for most people) and the Dow is in a trading range, as it has been for 60 of its 107 year existence, you can expect a 1-3% ROI per year. If you are fortunate enough to be invested in the DJIA during the good years, 1941-1963, and 1982-2000, then you can expect returns such as the 13.6% per year Perry speaks of. If you are invested during a period when the DJIA goes through a trading range, and enters a bull market, then you returns are PROBABLY going to be somewhere in between. How succesful you are in succeeding in investing for the long term is going to be determined by how the market did in the time period in which you invested, not the 107 year history of the DJIA.


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## m61376 (Aug 1, 2007)

R Chen said:


> There is a benefit for the opportunity to be able to trade for points (regardless of it makes financial sense or not).  If not, why are resales much cheaper than retail?  A major discussing point in favor of TS is its flexibility.  Without the ability to trade points, it is less flexible.  The opportunity cost to trade for points needs to be deducted when discussing the financials of trading a TS week for points.  This opportunity cost is subjective and will differ for each person.



I would agree that there is some benefit to being able to trade for points; whether or not it makes financial sense to do so is something else. As you state, the more flexibility and options the better. However, I don't think the price difference between resales and buying from the developer can be attributed to the ability to trade for points, as your post seems to suggest. The vast majority of buyers do not know that there is a resale market, most of those that have heard of resales are convinced that there is a difference between buying on the "second hand" market (and salespeople embellish the significance to those few educated consumers that inquire about resales) and, most importantly (IMHO) is most developer purchases are made on a whim, especially by first-time buyers. Salespeople have a knack for taking advantage of that vacation "high" which puts people in the mood and susceptable to the sales pitch of creating family memories.... I am not saying that informed people don't buy from the developer; as Dave posted, there are good resons for doing so. What I am saying is that most developer purchases are not made  by people who have really taken the time to learn the market and fully assess the different options.


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## PerryM (Aug 1, 2007)

jwq387 said:


> If I had been investing since 1933, then yes, I would have averaged 13% per year. HOWEVER, Perry, as you know, we have had two major "trading range "markets the last 75 years that have lasted at least 20 years each, where the market only moved up on an average of 2.5% per year.Therefore, if someone has only 20-25 years left to invest, and we hit one of these "trading range" markets, then 13% per year simply is not going to happen. These markets lasted 20-40 years, and over that period one only averages only about 2.5% apreciation, per year. Just some food for thought, in case some of you get excited about the prospect of "earning 13% per year for the rest of your life."
> 
> My apologies. there have been 2 major trading ranges in the DJIA since 1900. The first lasted 41 years, 1900-1941, with the Dow advancing only 1.8% per year. The second, occurred from 1963-1982, with the Dow advancing 2.5% per year. I know this is a discussion of the merits of buying new vs. resale, but we need to understand the history of the DJIA. If you invest in the DJIA for the next 40 years(the rest of your life for most people) and the Dow is in a trading range, as it has been for 60 of its 107 year existence, you can expect a 1-3% ROI per year. If you are fortunate enough to be invested in the DJIA during the good years, 1941-1963, and 1982-2000, then you can expect returns such as the 13.6% per year Perry speaks of. If you are invested during a period when the DJIA goes through a trading range, and enters a bull market, then you returns are PROBABLY going to be somewhere in between. How succesful you are in succeeding in investing for the long term is going to be determined by how the market did in the time period in which you invested, not the 107 year history of the DJIA.



True, but that goes for any investment - there are standard deviations but I know of no other investment with a 13% return over 70+ years that has withstood World War II, the Cold War, Korea, Vietnam, Desert Storms, Internet bubbles, you name the crisis and it has happened.  All in all a 70+ year average is a 70+ year average.

No one knows the future, you can only look at the past to make an educated guess.  Since the money needs to be put somewhere I can't think of a better way to invest.

Now one can take this average and build a simple system that will allow 4% to be removed and withstand the longest lackluster periods of the DJIA.  This is about as good as it gets in retirement systems.


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## PerryM (Aug 2, 2007)

*Good news!*

I just spent 5 minutes reviewing my DJIA historical numbers (hard to get, believe it or not-the dividends are proprietary numbers of Forbs magazine) here is what you should be aware of on the down side since 1933*:

1973 & 1974 had you losing 39.59%
1975 had you making 44.4%**

2000 – 2002 (Internet bubble) has you losing 27.45%
2003 had you making 28.28%**

That’s it since 1933 – the rest of the time has you smiling each quarter when you collected your fat 1% dividend check (4.3% dividend average for the year- 73 year average)  These losses are nothing to poo-poo, however if you never sell your stocks but pull out 4% a year you will weather these storms just fine. 

Find another investment that will let you base your retirement – how long will you live on retirement – 30 years, 40 years?  You need historical data that is at least twice that long to plan that far ahead.

*Before 1933 the stock market was really a futures market – needed just 5% cash and leverage 95%.  The crash of 1929 – 1932 lost 80% of the value of the stocks – just about the amount leveraged with nothing but paper.  The banking reforms of 1933 fixed all that.  You can't fool mother nature too long.

**Doesn't mean you get back your original amount - however psychologically the percentage gain keeps you hanging in there.  And investing is a one person (family) race where psychological factors mean everything.


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## JimC (Aug 2, 2007)

Dave M said:


> ...Having said all of that, I definitely believe there are occasionally some good reasons for buying directly from Marriott. An example might be where you have the opportunity to purchase at initial pre-construction prices and feel a need to own at and use a particular resort when it first opens, since there are no resales available.....



Or when you want to buy a high demand fixed week where there may not be many resales and the resale price is unlikely to offer much advantage.


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## jwq387 (Aug 2, 2007)

*DJIA History*



PerryM said:


> I just spent 5 minutes reviewing my DJIA historical numbers (hard to get, believe it or not-the dividends are proprietary numbers of Forbs magazine) here is what you should be aware of on the down side since 1933*:
> 
> 1973 & 1974 had you losing 39.59%
> 1975 had you making 44.4%**
> ...



Sounds great. Make no mistake, I totally agree with you on the investment vehicle. Even if retirees lost 40% of their 401K value in 2000,(which many did) they still recoup it over the next six years if they "stay the course."


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