Financial Experts Dave Ramsey & Suze Orman On Timeshares

While it may be true that the timeshare arrangements can work for some families - we acknowledge it is far more common to have found they DON'T work for most.  We've uncovered the opinions of some of the world's top financial advisors, see for yourself what they have to say.

DAVE RAMSEY 

According to Dave Ramsey, leading financial expert and television personality, timeshares are a scam.  Dave Ramsey has provided the world with over 20 years worth of reputable and solid financial advice, see how he reached his conclusion in his own words! (Quoted content begins below)

Myth: I can get a great deal on a timeshare and go for vacation every year! Plus, I can always sell it later. 

Truth: Timeshares are one of the biggest scams on the market today. Once you are stuck in one, you are stuck in a black hole.

The first word that should come to your head when you hear the word timeshares should be RUN! Run far, far away! If you run fast enough, you can eventually escape that annoying, high-pressure salesperson!

Think about this for a minute. Why in the world would you pay thousands and thousands of your hard-earned dollars for a place with minimal square-footage you might get the chance to visit for one week each year? 

Add to that the fact that you have absolutely no equity in the place. And you have to pay ongoing "maintenance fees."  Selling it is impossible. And it's basically just an expensive, ongoing headache. Sounds completely ridiculous, doesn't it? That's because it is!

Why All the Buzz?

Timeshares are one of the top sellers in the travel and hospitality industry. Thousands are available and millions of people "own" them. But that doesn't mean timeshares are a good idea. An article on MarketWatch.com tells us that timeshares are generally marketed and sold to people who really can't afford them. So if you think you can afford it, you can't. Even if you really think you can, your money is better off in a cookie jar.

The average cost of a timeshare is $14,500. If you put that money in a mutual fund averaging 12% over 10 years, you'd have about $48,000. That's good. 

In 20 years, you would have over $178,000. Even better.

In 40 years, you would have over $1.7 million! 

That's a lot of free money! Hope you like the vacation house!

Throwing money at a timeshare is not an investment and will not generate money for you. An investment implies that you can eventually sell it and make money. With timeshares, you're just pre-paying your hotel bill for the next 20 years whether or not you use it.

Getting Out of the Deal

If you've already taken the plunge and paid your Stupid Tax, here's how to get out of it. You're definitely going to lose money on this. Timeshares go down in value worse than a car. But it's better to cut your losses than to continue to lose any more money.  (Quoted content ended)

Dave Ramsey goes on to recommend contacting a company dedicated to helping timeshare owners dissolve their unwanted timeshare contracts legally and forever (hey, that sounds like us!)  

Suze Orman

Suze has been called “a force in the world of personal finance” by USA Today and a “one-woman financial advice power house” by CNBC, where she hosted a financial advice television show for over 15 years.  

As a #1 New York Times bestselling author, magazine and online columnist, and one of the top motivational speakers in the world today, Suze Orman is undeniably America’s most recognized expert on personal finance.

Recently, Consumer Advocate Suze Orman has had perhaps the most insightful analysis for Consumers to date regarding timeshare ownership and exit.  

When asked by a timeshare owner how to get out of a contract with escalating fees, Orman demonstrated her experience and knowledge of the underlying legal issues deftly.  Her advice is below.  Her very first recommendation is more like a command - gosh Suze, tell us how you really feel!  

"If you have a thought in your head, you will not do it. Honestly, they are the worst investment, but people don't buy in to timeshares because they're dumb.  Smart, savvy and well educated buy in because they are blatantly lied to about the value of the "opportunity" and the options to sell" after you're done enjoying your timeshare.  Once you have purchased them you can not sell them. You are not, do you hear me?! You are not not not not to ever to do a time ownership, such a waste of money!"

1.  The most important advice to Timeshare Owners is do not to pay any company an upfront fee to "SELL" your timeshare!

Most people understand that no one goes out searching to buy a timeshare - it's something that you get roped into during a presentation.  Because there is no market to sell timeshares, companies that want an upfront fee to "sell it for you" are most often scams.

2. Because markets are flooded, it’s a long shot that any resort will work with you.

With so many people looking to get out, and huge amounts of foreclosure inventory, resorts are steadfastly unwilling to assist timeshare owners out of their agreement without severe financial consequences.  

3. As hard as it is to spend more money, you'll need to pay to get out.  Don't go it alone - Get a solid company experienced in dealing with timeshares to help!

At the end of the day, you entered into a legally binding contract.  Getting out takes time, money, and a lot of experience. Ensure your contract exit is overseen by a qualified company - I do not recommend attempting to escape a legal real estate transaction by yourself. 

Oftentimes, a reputable and experienced company will already have built their own relationship with your resort, so they may have access to far more options than you do, based on the volume of business they do and the leverage that affords them. 

While there is nothing wrong with a company charging a fee for their services, keep in mind that a reputable company will offer some sort of guarantee for their work.  If they don't offer any sort of guarantee, it's probably not the right company for you.  

Look for substance - a company that employs attorneys and/or an escrow company is a good bet to ensure your transaction will be lawful, compliant, legal and permanent.

(Hey!  This also sounds like us!  We meet all of these qualifications, thanks Suze!)