4Reliefnow
TUG Member
Got your attention...please don't yell at me. I am going to demonstrate in simple math why DC points might be worth 80-90 cents to rent.
I will present the math two ways: First using a simple return on investment approach and then a second method which spreads the purchaxe cost over a useful life period.
Return on investment - Required Return 4%
Buy DC Points for $9.50 would require a 4% return of 38 cents a year
you could keep your $28,500 invested and make 4% a year and just rent the points from someone else. The points have a maintenance cost (from MVC website) of 41 cents a year. Add the 38 cents from invested capital and the 41 cents from maintenance and the points are costing you 79 cents a year.
You would be much better off renting the points for 80 cents(see point ad on TUG for 60 cents). Rent only as much as you want, skip a year if you don't travel as much, Just like airplanes and boats-----cheaper to rent than own!
This approach assumes you sell your points at the end for the purchase price (How did that work out for your weeks?)
Useful Life Approach: Spread the cost over a 20 year life
Buy points for $9.50 and spread the cost out over a 20 year useful life: $9.50/20 = 47.5 cents a year add the 41 cents maintenance and the cost is 88.5 cents a year. This approach assumes no return on investment or a final sale price which represents a very small annual percentage return.
If you can rent points for less than 88.5 cents you are better off financially than buying new trust points.
Keep this discussion n point: Does it make more sense to buy DC points or just rent what you need? I know that many people will say: "Just buy a Platinum week you want to use at $4,000 or less" but this is a buy vs rent points discussion.
Full disclosure: I converted my legacy week to DC Points. I did not buy any new DC Points. I intend to rent my points as an easier transaction than renting a week. You can actually enroll your weeks before the deadline and NOT BUY MORE POINTS (PM for contact information)
I will present the math two ways: First using a simple return on investment approach and then a second method which spreads the purchaxe cost over a useful life period.
Return on investment - Required Return 4%
Buy DC Points for $9.50 would require a 4% return of 38 cents a year
you could keep your $28,500 invested and make 4% a year and just rent the points from someone else. The points have a maintenance cost (from MVC website) of 41 cents a year. Add the 38 cents from invested capital and the 41 cents from maintenance and the points are costing you 79 cents a year.
You would be much better off renting the points for 80 cents(see point ad on TUG for 60 cents). Rent only as much as you want, skip a year if you don't travel as much, Just like airplanes and boats-----cheaper to rent than own!
This approach assumes you sell your points at the end for the purchase price (How did that work out for your weeks?)
Useful Life Approach: Spread the cost over a 20 year life
Buy points for $9.50 and spread the cost out over a 20 year useful life: $9.50/20 = 47.5 cents a year add the 41 cents maintenance and the cost is 88.5 cents a year. This approach assumes no return on investment or a final sale price which represents a very small annual percentage return.
If you can rent points for less than 88.5 cents you are better off financially than buying new trust points.
Keep this discussion n point: Does it make more sense to buy DC points or just rent what you need? I know that many people will say: "Just buy a Platinum week you want to use at $4,000 or less" but this is a buy vs rent points discussion.
Full disclosure: I converted my legacy week to DC Points. I did not buy any new DC Points. I intend to rent my points as an easier transaction than renting a week. You can actually enroll your weeks before the deadline and NOT BUY MORE POINTS (PM for contact information)
Oh, that is right, If I buy points I am buying from the developer and if I rent points I am buying resale ( one time use).