The Intersection of FIRE and Disney

robinb

DIS veteran
Joined
Aug 29, 1999
Resale. You are 100% correct that Disney will not lower direct prices, only offer incentives.

Our biggest issue with direct is the 100 points as we're just not ready to commit to that many at this time. I honestly haven't run the numbers much to see if it makes sense beyond that because it's a pretty big jump from our plan (we're looking for something in the 50-75 range).
As a long time DVCer I would say that the bare minimum you would want to buy is 75 points even if you bank and borrow. Your life as DINKs will be much different that your life with kids. We bought DVC before we had a child and loved to got to WDW in October and May ... until our DD started school and then we were relegated to the more expensive times of Christmas, Spring Break and Summer (Premier and Magic Seasons). I'm glad that we planned and we always had enough points. A standard view studio at AKV (never count on getting the cheaper value studios or the club level studios) will cost you between 116 and 146 points for a week for those seasons.

Is it a smart decision from a FIRE standpoint? The downsides are:
  • It is *not* an investment.
  • You are tying up $8,000 - $10,000 that could be working for you instead and you give up that income.
  • You have to pay dues every year even on those years you don't use them (bank and borrow).
  • Disney reserves the right to move around points "costs" to adjust for demand, so buying the minimum does not give you a lot of wiggle room.
  • You need to plan ridiculously far in advance. It will be worse in the next year as the refunded points from canceled reservations are pushed back into the system. If you can't plan at least 6-8 months in advance DVC is not for you. Busy times like Spring Break and Christmas fill up in the first week or two of the 11-month window. For instance, I own at BWV and parts of Easter week is already sold out for Standard and Boardwalk view studios. They do have a waitlist system in place that works a lot of the time.
The upsides are:
  • There is a resale market. You can sell your points and not take a total bath. Unlike other timeshares DVC holds it's value. I bought AKV for $92 (direct) in 2008 and it looks like contracts are going for about $114 (although my 2 50-point contracts would sell for more), I'd break even if I sold today (minus, of course, the time value of money).
  • If you really think that you will go every other year, then your additional outlay would be dues. Dues on 116 AKV points would be $890. That's $127 per night for a AKV standard view studio. You're getting a deluxe resort for a value resort price.
  • If you don't use your points, you can always rent them. My plans changed for January 2020 and I had two reservations that I rented for $20 per point. Those covered my dues for the entire year. Be aware that the average rental price is much less (around $16 per point I think) but I have not rented below $18 per point for years now. Note, rental prices on the DIS have deflated a bit due to our current crisis.
I think buying DVC is more of an emotional decision than a financial one. We are happy that we bought back in 90's and we had as many as 430 points at one time (we have 300 now). We used our points 2-3 times a year for years when our DD was younger. She's now in college and we are down to once a year. The biggest piece of advise I can give you is to buy where you want to stay. SSR is attractive for the price and the length of contract, but if you really want to stay near Epcot or the MK you may not be able to. As DVC brings in more and more resorts those Epcot resorts become harder and harder to get into at the 7 month window.
 

danceintherain

DIS Veteran
Joined
Oct 2, 2007
Disclaimer: I know there is a DVC specific subforum but our financials/goals more align with the people in here. That subforum would just tell me to buy. :P

Anyone on the FI/RE side looked into DVC? I had run a few analysis on it years ago and we decided to shelve the idea until the next downturn as prices seemed pretty inflated. Well... a pretty significant pullback happened and resale prices have started to soften. DVC prices lagged the market drop in 2008-2009 by a year or two so still a ways to go but much like investing in the market, we're putting plans in place regarding target resort(s) and price where we'd be interested so the decision isn't made on emotion.

Our target would be to buy enough points to cover a 1 week studio stay every 2 years (using banking/borrowing). That way we're not locked in to going every year if something happens. My calculations put AKL/SSR in the mid 130's per night and BLT/CCV in the $170-$180 per night range based on that strategy (using 2020 dues and current resale prices). I have the math on others as well but they're not as attractive.

Are we completely crazy to consider this? It goes counter to many biases we have in the FI world (timeshares, extravagance, etc) so I have some hesitation despite all numbers saying "this isn't a bad idea."

Note: We have done our couples trips to Disney World off site with hotel points. With kids entering the picture though we don't expect that to be as realistic and would prefer staying on site. I'm aware of the Swan/Dolphin hacks but that's quite point intensive and neither of us travel much for work anymore.
I've looked at it over the years and even if I could convince DH, I don't think it would hit the top of the priority list. He wouldn't agree to it, because it's not a great vacation for him and he doesn't love vacations in general. He has some major health issues that make standing in line, being around crowds, and heat in general more unpleasant than average.
My reasons are:
- Vacation time limits - when he was in the military, he got 30 days a year, so it was easier to justify. However, he usually took off a whole month when each baby was born, and he wasn't the one who needed to recover from childbirth. So we still couldn't necessarily pull off even every other year. Now, he has switched employers 3 times in the past 3 years and starts at their baseline for PTO every time. He gets about 3 weeks now, but can only flex his time so much to accommodate his own doctors appointments etc. If I worked also, then we would have to trade off for the kid's doctors appointments and illnesses too. I took the kids alone on our last Disney trip, because he couldn't work out enough time off. I cancelled a trip for our 10th anniversary (not for Disney) because he wanted to take off a week to spend with his brother over Christmas.
Unless neither of you are in contact with your families, or have a reasonable expectation that you'll be able to live super close to both sides indefinitely, I also wouldn't underestimate the amount of your vacation time they may start laying claim to after you have a child. Obviously, you can set boundaries.

- Interest changes - I love Disney and want my kids to go often, but often doesn't always mean every year, or even every other year. I want them to see other things too. My oldest is 9 now, and I don't expect his interest in Disney to stay around for more than another 5 years or so. He'll probably still come along happily enough, but I might want to accommodate him experiencing Universal or somewhere else. Obviously, we can stay at a hotel on the Disney property and still go to Universal, but we might not want to. My sister has been trying to convince me to venture down to Legoland for a few years now. It definitely is a better choice for her family, especially since she has two with Autism.
Once ODS hits middle school, it will be more difficult to justify pulling him out of school for vacation. We can't travel to Florida in the summer, unless we leave DH behind, so I can probably justify extending one of ODS' shorter school breaks to accommodate trips, until he's in high school. But, we haven't gotten there yet. DD's personality already makes me suspect that I won't be able to pull her out of school beyond elementary without a struggle. I haven't tried yet in elementary....we may not be able to even extend a break starting next year....

- The hotel isn't the only cost of a vacation - I have 4 kids, which makes me a little crazy, but even when I only had 2, it typically cost around $700-$1000 to fly our whole family to Disney on budget airlines. Even with credit card points, it becomes complicated to balance point use with out of pocket flight prices. Ticket prices keep getting higher too. We are fortunate enough to be able to utilize the military discounts...otherwise, I don't think we would have been able to go as much in the past. Even THOSE tickets are pushing $300/person now. For a family of 4, that's still $1200. Once you add in food, it becomes difficult to keep the cost down below $3000, even if you've gotten a good deal on a hotel.

- You can always rent points. It might not look as good a deal as owning, at first glance, but it certainly keeps your options open.

- We stay on property, because we love to be in the Disney bubble. But, as priorities change, we may shift to off, at least for a while. The kids aren't really a factor, except they are expensive. We typically have a vehicle with us anyway, so Disney transportation is nice but not a necessity. I did stay in the Swan with the kids for part of our last trip, but otherwise we've always had to transfer them out of the stroller to use Disney transportation or put them in the car. More often than not, they will fall asleep in transit back to the hotel for our afternoon break anyway, then their eyes will pop open as soon as we get back to the hotel. This hasn't kept us from taking breaks every day, but being super close to the hotel won't keep us from staying off property in the future either.
There is some benefit to being able to stay behind with the older kids while DH takes the younger ones back to the hotel. But, MOST of the hotels near Disney offer some amount of transportation to/from the parks, and if I have older kids with me, then I can grab a taxi anyway, since I won't have to worry about car seat safety.

- Finally, after my trip to Disneyland last summer, I started toying with the idea of taking my kids on Mommy and Me trips to Disneyland one at a time. It's not something I've considered with WDW, but it seems much more doable with Disneyland. It's a smaller area to cover, so I can do long weekends. There are TONS of hotel options that are walkable to the gate. It's also easier to plan at the last minute. FPs are day of. Dining reservations aren't as difficult to get, and the counter service food is better anyway. Staying in a Disney-owned resort might be something I do once at Disneyland, just for the experience. But, I have no interest in doing it every time, like we've done at WDW for 10+ years.
 


SouthFayetteFan

Saving Money on Disney Vacations since 2006
Joined
Sep 6, 2014
Joining In!
We are 33 and on target for FIRE by 55. DH just started a new job, and hopefully it will be his last one, but we shall see. At minimum, I hope he'll stay where he is long enough for his matches to vest... His salary increased by about 30% though, which is giving us a LOT more choices than I was anticipating. (darn lifestyle creep). When he applied for the job in November, I was thinking we would have no trouble just socking his raise away into retirement and get that FIRE date up to 50 (at least 52)! But, we want all the things!

So anyway, I'm here for extra motivation to get that savings rate up and keep spending down!
So now you’re just going to join in on all of the threads I create! 😊 🤣

WELCOME!
 
  • beck02

    Earning My Ears
    Joined
    Aug 7, 2013
    Does anyone else keep a list of goals? Most of mine are financial based, although I've got some fitness/weight goals too. I've had my "top ten" (usually closer to 20 items) since at least 2009. I've got short term, middle, and long range goals. It's funny (sometimes sad) to read some of my older goals. The time & energy spent on achieving something that wasn't that important after all (like building my own web page), and the goals which are STILL on the list with little to no progress to them (like renovating the kitchen). And it's nice to keep a list of the achieved goals too, to remind myself of progress.
     

    Samantha*belle

    Earning My Ears
    Joined
    May 20, 2020
    I feel like I've found my people! Budget conscientious folks who enjoy Disney, travel, life, etc. :-)

    I've dipped my toes in the MMM world but found so many to be judge-y and really harsh. MMM recommended not helping your kids out with college to achieve FIRE. I was so broke in college that I went hungry sometimes even after working my jobs and I wouldn't wish that on anyone, especially not my own kid! If that means I'll never achieve FIRE, so be it. My husband and I are in our late 30s and we're aiming more for FI vs. RE. Pre-babies we were maxing out our 401ks and Roth IRAs, but fast-forward to two kids (2 under 2!) today and we're saving 10% in our Roth 401ks, contributing the max in our Roth IRAs, and a small amount each month in 529s. I wish we could save more, but childcare is our budget-buster at 30% of our take-home pay. Daycare centers are SUPER expensive in the large midwestern city that we live in. I'm hoping we'll get back to saving more once we're not paying that large bill....in 3 years.

    Does anyone have ideas about how to pass IRAs to kids given the new IRS rules about inheritance? At some point soon we're going to meet with a lawyer to set-up a will & trust, but it would be nice to have some ideas going into it.


    Does anyone else keep a list of goals? Most of mine are financial based, although I've got some fitness/weight goals too. I've had my "top ten" (usually closer to 20 items) since at least 2009. I've got short term, middle, and long range goals. It's funny (sometimes sad) to read some of my older goals. The time & energy spent on achieving something that wasn't that important after all (like building my own web page), and the goals which are STILL on the list with little to no progress to them (like renovating the kitchen). And it's nice to keep a list of the achieved goals too, to remind myself of progress.
    I love the idea of short-term goals, we just have long-term ones!
     

    QueenIsabella

    DIS Veteran
    Joined
    Jan 17, 2016
    I feel like I've found my people! Budget conscientious folks who enjoy Disney, travel, life, etc. :-)

    I've dipped my toes in the MMM world but found so many to be judge-y and really harsh. MMM recommended not helping your kids out with college to achieve FIRE. I was so broke in college that I went hungry sometimes even after working my jobs and I wouldn't wish that on anyone, especially not my own kid! If that means I'll never achieve FIRE, so be it. My husband and I are in our late 30s and we're aiming more for FI vs. RE. Pre-babies we were maxing out our 401ks and Roth IRAs, but fast-forward to two kids (2 under 2!) today and we're saving 10% in our Roth 401ks, contributing the max in our Roth IRAs, and a small amount each month in 529s. I wish we could save more, but childcare is our budget-buster at 30% of our take-home pay. Daycare centers are SUPER expensive in the large midwestern city that we live in. I'm hoping we'll get back to saving more once we're not paying that large bill....in 3 years.

    Does anyone have ideas about how to pass IRAs to kids given the new IRS rules about inheritance? At some point soon we're going to meet with a lawyer to set-up a will & trust, but it would be nice to have some ideas going into it.




    I love the idea of short-term goals, we just have long-term ones!
    I hear you on the MMM stuff! I read over there, but some of them are very extreme (I would go so far as to say "wackadoodle" in a few cases). The important thing is to take what you can use and leave the rest. I 100% agree with you on the "kids' college" thing. Not only does it sound extremely selfish, leaving them high and dry, but it can leave permanent scars. Like you, I was on the hook for all my own college, and I still have money anxiety, even though we're fine. I accept that I'll never get rid of that. Thanks, Mom and Dad! But, my parents had no choice--I can't imagine NOT helping your child out, if you can. Not necessarily paying every dime, but at least helping.

    We're in our 50's, are FI but no RE here. Well, except that I'm a SAHM, have been for 25 years, so maybe I've RE'd (youngest is 14). DH likes working, and for better or worse, we all love travel. We're a family of 6, so travel is never cheap!

    As to the IRA thing--we've considered that, because most of our net worth is in pre-tax accounts. We had our own IRAs, then DH inherited 7(!) when his mom died. A couple suggestions: first, visit Bogleheads, if you haven't already. I find them more my style, versus the gang at MMM. Second, it might be worth your while to visit an estate attorney. We have a son with Asperger's who has impulse control issues (he knows this). He's 23, so technically, we would have no control. We set up his funds in a trust, so that right now, he needs my signature to withdraw them. I mention this because your kids are young--you don't know what you'll be dealing with in 20 years. I'm a fan of giving kids as much control as they can handle. But, an estate attorney can work with your specific needs--and will revisit, every 10 years or so.

    As to what, specifically, we're doing with IRAs--our hope is to get most of the money out of them before we die. That way, we can leave our kids money post-tax. I don't know how well this will work. One of the big questions is, how will the tax laws look when you die? You have no clue, I have no clue, nobody knows. So, do the best you can in the here and now, and adjust along the way. BTW, there were many heated arguments on Bogleheads, on "with draw 10% a year to even out the tax hit" to "leave it alone, and withdraw the entire IRA on Year 9, Day 364".

    Most important, IMHO, is to give your children a good financial understanding. If they can manage money well, however your estate passes to them, those lessons will be in play.
     
  • Starport Seven-Five

    Mouseketeer
    Joined
    Aug 16, 2019
    As a long time DVCer I would say that the bare minimum you would want to buy is 75 points even if you bank and borrow. Your life as DINKs will be much different that your life with kids. We bought DVC before we had a child and loved to got to WDW in October and May ... until our DD started school and then we were relegated to the more expensive times of Christmas, Spring Break and Summer (Premier and Magic Seasons). I'm glad that we planned and we always had enough points. A standard view studio at AKV (never count on getting the cheaper value studios or the club level studios) will cost you between 116 and 146 points for a week for those seasons.
    This is a good point and something I hadn't considered. My initial planning was around "Dream Season" standard view rooms and now that I look at the chart a bit more... our public school breaks are all Magic Season or above (except for a couple weeks in September) so need to readjust that target a bit to protect. We will be at the mercy of the resale markets regardless but the target should shift up a bit.

    We could do split stays or add points on later but that's probably stupid when we only need a few more points.
    I think buying DVC is more of an emotional decision than a financial one. We are happy that we bought back in 90's and we had as many as 430 points at one time (we have 300 now). We used our points 2-3 times a year for years when our DD was younger. She's now in college and we are down to once a year. The biggest piece of advise I can give you is to buy where you want to stay. SSR is attractive for the price and the length of contract, but if you really want to stay near Epcot or the MK you may not be able to. As DVC brings in more and more resorts those Epcot resorts become harder and harder to get into at the 7 month window.
    Agreed that this is definitely an emotional decision. I grew up going to Disney World and I picture doing the same with our kids.

    The plan is definitely to buy where we are happy staying. If we can bounce around a bit that's great but we want to be sure we're not stuck at a resort we dislike due to no availability at 7 months.
     

    georgina

    DIS Veteran
    Joined
    Apr 21, 2003
    Does anyone have ideas about how to pass IRAs to kids given the new IRS rules about inheritance? At some point soon we're going to meet with a lawyer to set-up a will & trust, but it would be nice to have some ideas going into it.
    When DH retired we rolled any pre-tax money in his 401k into an IRA. I have been gradually converting it over several years into his Roth IRA. That way we spread the tax hit out over several years. Plus PA doesn't tax IRA withdrawals (his contributions did have PA tax taken out), but when we move to VA next year they will tax them. We have a few more years for conversion now that the minimum distribution age is 72. As I am looking to build up cash for a house I may just withdraw some IRA money this year instead of converting it.
     

    Starport Seven-Five

    Mouseketeer
    Joined
    Aug 16, 2019
    My reasons are:
    - Vacation time limits - when he was in the military, he got 30 days a year, so it was easier to justify. However, he usually took off a whole month when each baby was born, and he wasn't the one who needed to recover from childbirth. So we still couldn't necessarily pull off even every other year. Now, he has switched employers 3 times in the past 3 years and starts at their baseline for PTO every time. He gets about 3 weeks now, but can only flex his time so much to accommodate his own doctors appointments etc. If I worked also, then we would have to trade off for the kid's doctors appointments and illnesses too. I took the kids alone on our last Disney trip, because he couldn't work out enough time off. I cancelled a trip for our 10th anniversary (not for Disney) because he wanted to take off a week to spend with his brother over Christmas.
    Unless neither of you are in contact with your families, or have a reasonable expectation that you'll be able to live super close to both sides indefinitely, I also wouldn't underestimate the amount of your vacation time they may start laying claim to after you have a child. Obviously, you can set boundaries.
    We're pretty lucky in this regard as both of have very generous/flexible employers. Time off really isn't an issue.

    - You can always rent points. It might not look as good a deal as owning, at first glance, but it certainly keeps your options open.
    We've considered this but really haven't liked the variability in the pricing of it. Prices have gone up ~$3/point since we became aware of this option and that's only been a couple years. DVC dues go up but they're much more stable.

    I hear you on the MMM stuff! I read over there, but some of them are very extreme (I would go so far as to say "wackadoodle" in a few cases). The important thing is to take what you can use and leave the rest. I 100% agree with you on the "kids' college" thing. Not only does it sound extremely selfish, leaving them high and dry, but it can leave permanent scars. Like you, I was on the hook for all my own college, and I still have money anxiety, even though we're fine. I accept that I'll never get rid of that. Thanks, Mom and Dad! But, my parents had no choice--I can't imagine NOT helping your child out, if you can. Not necessarily paying every dime, but at least helping.
    Bolded portion is the key. I find some of the stuff (especially in the message board) out there but the portions that resonate with me are very motivating. So much of the FI community is softball statements meant to not offend that MMM is kind of refreshing.
     

    Samantha*belle

    Earning My Ears
    Joined
    May 20, 2020
    I hear you on the MMM stuff! I read over there, but some of them are very extreme (I would go so far as to say "wackadoodle" in a few cases). The important thing is to take what you can use and leave the rest. I 100% agree with you on the "kids' college" thing. Not only does it sound extremely selfish, leaving them high and dry, but it can leave permanent scars. Like you, I was on the hook for all my own college, and I still have money anxiety, even though we're fine. I accept that I'll never get rid of that. Thanks, Mom and Dad! But, my parents had no choice--I can't imagine NOT helping your child out, if you can. Not necessarily paying every dime, but at least helping.

    We're in our 50's, are FI but no RE here. Well, except that I'm a SAHM, have been for 25 years, so maybe I've RE'd (youngest is 14). DH likes working, and for better or worse, we all love travel. We're a family of 6, so travel is never cheap!

    As to the IRA thing--we've considered that, because most of our net worth is in pre-tax accounts. We had our own IRAs, then DH inherited 7(!) when his mom died. A couple suggestions: first, visit Bogleheads, if you haven't already. I find them more my style, versus the gang at MMM. Second, it might be worth your while to visit an estate attorney. We have a son with Asperger's who has impulse control issues (he knows this). He's 23, so technically, we would have no control. We set up his funds in a trust, so that right now, he needs my signature to withdraw them. I mention this because your kids are young--you don't know what you'll be dealing with in 20 years. I'm a fan of giving kids as much control as they can handle. But, an estate attorney can work with your specific needs--and will revisit, every 10 years or so.

    As to what, specifically, we're doing with IRAs--our hope is to get most of the money out of them before we die. That way, we can leave our kids money post-tax. I don't know how well this will work. One of the big questions is, how will the tax laws look when you die? You have no clue, I have no clue, nobody knows. So, do the best you can in the here and now, and adjust along the way. BTW, there were many heated arguments on Bogleheads, on "with draw 10% a year to even out the tax hit" to "leave it alone, and withdraw the entire IRA on Year 9, Day 364".

    Most important, IMHO, is to give your children a good financial understanding. If they can manage money well, however your estate passes to them, those lessons will be in play.
    Yes. Some of those approaches are head-scratchers. Although, my husband and I were pretty creative about ways to save money and we were at just over half of our income going into savings while also aggressively paying down my student loan. Ahhh those were the days. I'm hoping that all of those years of saving mean that these daycare years won't impact us too terribly in the long-run. I'm not sure that it will ever feel like we've saved "enough" because of all the times I remember just barely getting by. The economic anxiety stays with you indeed!

    If something happened to both of us, we want to have the plan we'd like in place for our kids and the ~$3 million in life insurance and assets especially if this occurs when they're minors. This pandemic has us reflecting in ways we otherwise never would.

    Thanks for the tip to visit Bogleheads. :)
     
  • Samantha*belle

    Earning My Ears
    Joined
    May 20, 2020
    When DH retired we rolled any pre-tax money in his 401k into an IRA. I have been gradually converting it over several years into his Roth IRA. That way we spread the tax hit out over several years. Plus PA doesn't tax IRA withdrawals (his contributions did have PA tax taken out), but when we move to VA next year they will tax them. We have a few more years for conversion now that the minimum distribution age is 72. As I am looking to build up cash for a house I may just withdraw some IRA money this year instead of converting it.
    Great idea to slowly convert it. If one is in a lower earnings year or tax bracket one year vs. another, I could see this being especially advantageous. I'm so glad our employers both started offering the Roth 401k a couple of years ago right now we're far more loaded on the pre-tax than post, but over time they'll trade places.
     

    georgina

    DIS Veteran
    Joined
    Apr 21, 2003
    Great idea to slowly convert it. If one is in a lower earnings year or tax bracket one year vs. another, I could see this being especially advantageous. I'm so glad our employers both started offering the Roth 401k a couple of years ago right now we're far more loaded on the pre-tax than post, but over time they'll trade places.
    Yes, he started taking advantage of Roth 401k when it was offered. DH retired in 2017 at age 63, after our last graduated college. So I have some time to convert, but he worked for that company for 37 years so there was a lot.

    I also found a loophole (net unrealized appreciation) for all the matching company stock he had in there. We rolled it out as shares and only had to pay ordinary tax on the basis which was about 20% of its value. When sold there would be capital gains tax on the other 80% but I am using it for charitable donations.
     

    SouthFayetteFan

    Saving Money on Disney Vacations since 2006
    Joined
    Sep 6, 2014
    In today's "mini celebration" my NW is now higher than it was at year end. Of course that's partially due to my high savings rate through the first 5 months of the year. BUT I will celebrate nonetheless, because coming out of a crazy 3 month period with NW unchanged is worth celebrating in my book! :D
     

    bernina

    DIS Veteran
    Joined
    Jan 25, 2014
    In today's "mini celebration" my NW is now higher than it was at year end. Of course that's partially due to my high savings rate through the first 5 months of the year. BUT I will celebrate nonetheless, because coming out of a crazy 3 month period with NW unchanged is worth celebrating in my book! :D
    same!! It's kind of fun we get to keep celebrating 🥳 Congrats!!
     



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