Dave Ramsey doesn't like timeshares

[jimf41]

All you have to do is look at completed listings on eBay. There are some ads for Marriott timeshares that couldn't even pull a minimum bid of $1. Marriott has not been immune to the latest downturn in resale pricing...

Burg1121 and I are not interested in "some" MVCI properties, we've each asked if you could please negotiate getting us the properties we stated for 10% of what we paid. I went a step further and offered to pay 20% and I'll let you keep the extra 10%.

 

[ace2000]

The 10% value figure covers developer purchases in general, there will obviously be some valued higher and some lower. I think that is a fair figure for the overall resale market after being purchased directly from the developer. In fact, you can purchase some resale Marriott units for that 10% price.

Jim - please read my previous post above... I was referring to the overall resale market.

I guess I thought the thread was about Dave Ramsey's thoughts on timeshares in general since his name was in the title on the original post. My thoughts in this thread would apply to Marriott timeshares also, even though I would agree that Marriott's do retain their resale values better than the norm. Can we at least agree on that?

Anyway, I'm moving on...

 

[jimf41]

No - but most now sell at 40% or less for the majority of weeks (excepting those few super high demand periods that may hold 60-70% after retail sale). No car suffers a 40-60% loss on day 10 either. Timeshares, regardless of brand, still hold the record for depreciation resale vs retail pricing.

I don't disagree with your numbers John. There is another side to a TS purchase that you don't consider when looking at TS ownership from a financial investment standpoint. I didn't buy at Ocean Pointe or Frenchman's Cove to make money. At Ocean Pointe I've broken even on my plat week purchased in 2002 from the developer. I own 3 silver weeks there also and those are worth maybe 40-50% of what I paid for them.

I've only used the plat week 3 times but the silver weeks I always use because they are all oceanfront. I'm thinking of selling the plat week but I'll never sell the silver weeks because they are more valuable to me. Financially the plat week was the best "investment", retaining about 100% of it's original cost. But the silver weeks are when my children and grandchildren visit and I just can't put a price on watching them make sandcastles at the beach or getting their faces painted by a clown.

The cheapest I've seen a 3bdrm silver oceanfront at OP is around 17k. I think I paid about 21 or 22k. I wouldn't care if you could pick one up resale today for 10k. I would never swap the last 7 years of memories or the next 10 years for the difference of 12k.

Could I have done this all cheaper by renting a hotel room or even a TS? Yes, most likely I would have saved many thousands of $$$. But would I have taken my family on all these vacations if I didn't buy into the dream back in October of 2002? No, I know I wouldn't have.

Last night my wife and I sat on the front porch and split a bottle on Stags Leap Cabernet. It's a $40 bottle and we finished it in about an hour and a half. It's worth nothing after you use it once, not even a nickel deposit. I guess it was a bad "investment". It was a lot of fun drinking it and talking over our past trips and the upcoming ones planned for this year and next.

 

[timeos2]

its not monetary

I don't disagree with your numbers John. There is another side to a TS purchase that you don't consider when looking at TS ownership from a financial investment standpoint. I didn't buy at Ocean Pointe or Frenchman's Cove to make money. At Ocean Pointe I've broken even on my plat week purchased in 2002 from the developer. I own 3 silver weeks there also and those are worth maybe 40-50% of what I paid for them.

I've only used the plat week 3 times but the silver weeks I always use because they are all oceanfront. I'm thinking of selling the plat week but I'll never sell the silver weeks because they are more valuable to me. Financially the plat week was the best "investment", retaining about 100% of it's original cost. But the silver weeks are when my children and grandchildren visit and I just can't put a price on watching them make sandcastles at the beach or getting their faces painted by a clown.

The cheapest I've seen a 3bdrm silver oceanfront at OP is around 17k. I think I paid about 21 or 22k. I wouldn't care if you could pick one up resale today for 10k. I would never swap the last 7 years of memories or the next 10 years for the difference of 12k.

Could I have done this all cheaper by renting a hotel room or even a TS? Yes, most likely I would have saved many thousands of $$$. But would I have taken my family on all these vacations if I didn't buy into the dream back in October of 2002? No, I know I wouldn't have.

Last night my wife and I sat on the front porch and split a bottle on Stags Leap Cabernet. It's a $40 bottle and we finished it in about an hour and a half. It's worth nothing after you use it once, not even a nickel deposit. I guess it was a bad "investment". It was a lot of fun drinking it and talking over our past trips and the upcoming ones planned for this year and next.

Jim - Now we're in agreement as there is no comparison to jamming into a rental room vs a luxury 1-2-3 or more bedroom timeshare for roughly equal dollars expended. And the non-monetary part of the equation is critical to the personal value derived. But finance "experts" are going to look at the bottom line - nothing but the bottom line - and it is tough to impossible to make a case for retail timeshare purchase & have that work. Even resale can be a tough one to make a positive, bottom line outcome. The intangibles aren't going to factor into the expert advice. They look at the drepreciation & nothing else - and in that area timeshare stands alone as the worse "investment" - especially at retail prices - there is.

 

[littlestar]

Jim - Now we're in agreement as there is no comparison to jamming into a rental room vs a luxury 1-2-3 or more bedroom timeshare for roughly equal dollars expended. And the non-monetary part of the equation is critical to the personal value derived. But finance "experts" are going to look at the bottom line - nothing but the bottom line - and it is tough to impossible to make a case for retail timeshare purchase & have that work. Even resale can be a tough one to make a positive, bottom line outcome. The intangibles aren't going to factor into the expert advice. They look at the drepreciation & nothing else - and in that area timeshare stands alone as the worse "investment" - especially at retail prices - there is.

John, great post.

My brother-in-law is a real estate investor and quite wealthy - he actually carries purchase agreements in the trunk of his car at all times (laughter). We gave him and his family a stay at one of our high-end timeshare resorts and they absolutely loved it. Not too long ago they called us and offered us a week long stay in one of their whole ownership condos for a trade for either our Marriott Vacation Club or DVC points. Even with them enjoying their stays at our "branded" timeshare resorts, my brother-in-law will absolutely not buy anything that he can't "make money" on.

 

[M. Henley]

Ha

You are more than welcome.
:whoopie:

Thanks for contributing to the discussion in a positive way.

 

[Superchief]

If you compare the loss in value of the Marriott timeshares to loss in real estate or stock investments over the last two years, all have gone down dramatically. Since the MVC resorts are deeded property, at least I am only exposed to a few thousand dollars but still can keep my 'property' and enjoy my vacations. This is why I would much rather own a few timeshare weeks (deeded property only), rather than vacation homes/ condiminiums. I would never have been able to afford the vacations my family has enjoyed if we had to stay in hotels and eat all of our meals in restaurants.

 

[richardm]

It's paid advertising....

There has been a tremendous amount of dialogue about the validity of media personalities and their opinions on the industry. I didn't read this entire thread, but say a few names include Ramsey and Clarke Howard.

Has anyone considered that both of these individuals may simply have been paid for marketing by a company with a "Donate your timeshare" business model? Helping to spread a negative perception of timeshare ownership among uneducated owners simply reinforces their negative mindset, and makes it even easier for the "Donate" groups to gather clients.

Perhaps their public opinions have simply been influenced by the advertising revenue they have generated, and satisfied timeshare owners should not spend too much time or thought worrying about it..

 

[josh1231]

You know, with Dave Ramsey at least, I would say probably not the case. I have heard him bash reverse mortgage and debt consolidation companies even though they advertise during his show saying if it was his choice they wouldn't be advertising during his show, but it's fox business' choice.

 

[richardm]

Silly Rabit, tricks are for kids!

There are multiple levels of advertising for each piece of media. You have local ads sold by the regionial station, national ads sold by the broadcaster or distributor, and direct ads sold by the program itself.

Chances are the advertisers you are referring to don't even realize they are falling into that timeslot. Most of our mass media marketers buy up bulk placements at discounted prices- so don't always know the specific placements they are getting.

 

[josh1231]

Silly Rabit, tricks are for kids!

There are multiple levels of advertising for each piece of media. You have local ads sold by the regionial station, national ads sold by the broadcaster or distributor, and direct ads sold by the program itself.

Chances are the advertisers you are referring to don't even realize they are falling into that timeslot. Most of our mass media marketers buy up bulk placements at discounted prices- so don't always know the specific placements they are getting.

So you are saying a company like "Donate your timeshare" pays Dave Ramsey to say timeshares are bad so that people will want to sell their timeshare, and hopefully sell with them? Now you're just being rediculous.

Could it just be the fact that generally speaking timeshares are a less than favorable purchase financially, and though people on this board have figured out great ways to make them work out for them, that most people lose out purchasing timeshares?

And maybe he gives financial advice for the masses, but each individual person still has to use their own brain to determine what is the correct purchase for them individually. I listen to Dave Ramsey and follow his advice. I just purchased a timeshare 2 months ago. I did so because for me it made sense for me and because I paid $5500 for a timeshare that other people purchase for $30,500. For most of the people who buy from a developer and make an impulse decision, it is going to be a disastrous purchase.

 

[richardm]

I'm sure you are probably right...

And I'm also sure the direct link on his website (and the new section devoted to timeshares) are also just an unfortunate coincidence..

Sorry to splash cold water on your hero worship- you don't have to turn on him now, or reach for your torch and pitchfork- and it doesn't mean his advice should be totally disregarded. Just the reality of how marketing and paid advertising actually work..

The same company advertised with Clark Howard in 2004. Same basic salespitch and link buy.. You can probably find the info on his achives. You'll probably be surprised how similar the ads sound.

 

[josh1231]

I'm sure you are probably right...

And I'm also sure the direct link on his website (and the new section devoted to timeshares) are also just an unfortunate coincidence..

Sorry to splash cold water on your hero worship- you don't have to turn on him now, or reach for your torch and pitchfork- and it doesn't mean his advice should be totally disregarded. Just the reality of how marketing and paid advertising actually work..

The same company advertised with Clark Howard in 2004. Same basic salespitch and link buy.. You can probably find the info on his achives. You'll probably be surprised how similar the ads sound.

As you should be able to see by my recently purchasing a timeshare my "hero worship" only goes so far. Dave Ramsey has a lot of great advice and some people hang on every word he says, some people adapt his advice to their lifestyle. I fall in the latter category.

He may in fact get paid, that is really not my point. You're trying to make the point that the only reason he says timeshares are bad for people is because he may or may not be getting paid money. I'm saying he believes they are bad and has partnered with someone who can take that belief and perhaps generate some advertising dollars that way.

There is a lot of proof that timeshares are bad for a lot of people. There is no disputing that. I for one believe they're good for me, and so do many people on this board.

 

[Latravel]

Timeshares are not financial investments! They should only be purchased if you can afford it with any extra money you have. If you have to think too much about the purchase, you shouldn't be buying a timeshare, resale or direct.

Tombo - I would consider the people I know to be affluent (everyone is a millionaire, which is easy in California) and many own Marriott timeshares. I can tell you none ever bought on the resale market because they didn't need to.

 

[MikeM132]

Well, a financial guru recommended buying Wachovia Bank stock several years ago, which I did. My developer-bought timeshares were a much better investment.

 

[Beverley]

No - but most now sell at 40% or less for the majority of weeks (excepting those few super high demand periods that may hold 60-70% after retail sale). No car suffers a 40-60% loss on day 10 either. Timeshares, regardless of brand, still hold the record for depreciation resale vs retail pricing.

You may be right about the numbers ... I really do not know. However, to compare to the folks that just pick up and go when ever and where ever they want, I think that is great for them. After their trip their residual value is the memories.

Of course we all get to keep them regardless of how we waste our money. Every one wastes something some time and vacations are not investments. A beach house is not a vacation, that is an investment. Timeshares are prepaid for vacations, they are not investments. I accept that and buy them anyway and I continue to "rock on with my bad self". :whoopie:

To each his own.

Beverley

 

[Beverley]

Last night my wife and I sat on the front porch and split a bottle on Stags Leap Cabernet. It's a $40 bottle and we finished it in about an hour and a half. It's worth nothing after you use it once, not even a nickel deposit. I guess it was a bad "investment". It was a lot of fun drinking it and talking over our past trips and the upcoming ones planned for this year and next.

Now you're talking!!

Beverley

 

[SueDonJ]

... I continue to "rock on with my bad self". :whoopie:

Now that made me laugh. "You go, girl!"

 

[Latravel]

"I continue to "rock on with my bad self"

Love it!

 

[#1 Cowboys Fan]

Last night my wife and I sat on the front porch and split a bottle on Stags Leap Cabernet. It's a $40 bottle and we finished it in about an hour and a half. It's worth nothing after you use it once, not even a nickel deposit. I guess it was a bad "investment". It was a lot of fun drinking it and talking over our past trips and the upcoming ones planned for this year and next.

In Maine, you would have had to pay the fifteen cent deposit---so you could have gotten that back

Pat

 

[applegirl]

I find it so hard to believe there are so many owners out there that do not make use of their purchase!

OMG! I can't tell you how many people I have met who own t/s and rarely or never use them. Many don't even let family use them (as an above poster mentioned). Sometimes I tell them about TUG and sometimes I don't. You can kinda tell sometimes those who would be willing to go the extra mile and investigate TUG, but most would not. There are a lot of people out there who may complain about not vacationing but then are not willing to spend the time to plan it out. I think a lot of t/s owners fall in this category!

Too bad for them because we take more vacations than we know what to do with, and we only own one t/s week! (FYI: between locking-off, getaways and other hotel stays).

Janna

 

[Beverley]

Janna,

You have a good point.

Interestingly enough the people that I know that do not make good use of their t/s often complain about the system or the trading company as never having anything they want. After a few questions I find out that they are not trying to make plans ahead of time. They usually call (no pending request) about 2 or 3 months out for a popular area and then blame the system or the trading company for not having what they want.

Beverley

 

[tombo]

Timeshares are not financial investments! They should only be purchased if you can afford it with any extra money you have. If you have to think too much about the purchase, you shouldn't be buying a timeshare, resale or direct.

Tombo - I would consider the people I know to be affluent (everyone is a millionaire, which is easy in California) and many own Marriott timeshares. I can tell you none ever bought on the resale market because they didn't need to.

It must be easy for people to become millionaires in California since they can attain that status even though they make poor financial decisions (like buying timeshares from the developer rather than resale). I need to move to California if it is that easy to become a millionaire. If everyone is so rich why is the state of California almost bankrupt?

Hmm. How does everyone become a millionaire when the highest per capita income in the richest county in California for 2009 is $91,483? Not only do they apparently all become millionaires, they all do so while spending more money than they have to on big ticket purchases just because they can. I think I am beginning to see why the state is going broke.

http://www.city-data.com/forum/city-vs-city/636607-richest-us-counties-per-capita-income.html

I guess California millionaires also pay sticker price for cars and asking price for homes etc rather than negotiating because they can afford to pay more than they have to. The few rich people I know don't blow their money buying something for $40,000 that they could buy for $10,000, but of course it is very hard to become a millionaire here, so they do have to watch their pennies.

 

[davidvel]

Hmm. How does everyone become a millionaire when the highest per capita income in the richest county in California for 2009 is $91,483? Not only do they apparently all become millionaires, they all do so while spending more money than they have to on big ticket purchases just because they can. I think I am beginning to see why the state is going broke.

Are you trying to say that that per capita income (PCI) is low???

Not sure what the foundation, basis or bitterness for the anti-CA rant is, but they may become millionaires because they make so much money each year. Note that PER CAPITA income per the BEA is defined as follows:

Per capita personal income is calculated as the personal income of residents of a given area divided by the resident population of the area.
http://www.bea.gov/newsreleases/regional/lapi/2009/lapi0409.htm

It is not the average family income, nor average income per wage earner; it is average income PER PERSON ALIVE in the county. As such, the example given by you means that, on average, a family of 4 in that county "earns" 91,483*4=$365,932.

FYI the PCI for Mississippi is $26,000.

 

[tombo]

Are you trying to say that that per capita income (PCI) is low???

Not sure what the foundation, basis or bitterness for the anti-CA rant is, but they may become millionaires because they make so much money each year. Note that PER CAPITA income per the BEA is defined as follows:

It is not the average family income, nor average income per wage earner; it is average income PER PERSON ALIVE in the county. As such, the example given by you means that, on average, a family of 4 in that county "earns" 91,483*4=$365,932.

FYI the PCI for Mississippi is $26,000.

I was responding to a quote that said that it is easy to become a millionaire in California and that everyone LAtravel knows is a millionaire. I was also responding because the statement was made that the millionaires LAtravel knew who purchased Marriott bought from the developer because they didn't need to buy resale inferring that those who purchase resale could not afford to buy from the developer. I was simply responding to those remarks, not bashing all of California.

I realize that California has more milionaires than any other state in the US and one of the highest per capita incomes, but not EVERYONE is a millionaire and I don't believe that it is EASY to become a millionaire anywhere, even in California. I specifically chose the RICHEST county in California to show that even in that county not EVERYONE is a millionaire. There are people selling cars, working at Mcdonalds, running mom and pop businesses, waiting tables, and even acting who make close to mininmum wage. There are people working on the millionaires cars, building their houses, landscaping their yards, being nannies for their children, teaching their children at school, and cleaning their pools who are not millionaires. A community built of nothing but millionaires could nt survive because you have to have a working class of people to do the menial hard labor jobs that it takes to keep an infrastructure operating.

The number of millionaire HOUSEHOLDS in California: 268138, the population of California in 2008 was 36,756,666 . There are a lot of people in California who have not found it easy to become millionaires, and trust me there are a whole lot of people in Mississippi who have known all their lives that it is hard if not impossible to become a millionaire here.

Perhaps coming from a state with the fewest number of millionaires and lowest per capita incomes makes it hard to believe that becoming that rich anywhere could be easy and something the majority of people do. If that is the case where you live congratulations and I really should move to California where I too could easily become a millionaire.