I recently attended a sales presentation for a timeshare at the Hyatt Piñon Point in Sedona, Arizona. I was warned that timeshares are notoriously bad investments, but I couldn’t help be enthused by the presentation. The idea of living anywhere at any time seemed to be the perfect fit. After all it’s basically what I do anyway.
‘You’re paying rent as it stands now’ the man told me. ‘Might as well make an investment with the same money.’ It sounded so convenient.
He drew out a table.
‘How many nights do you spend in hotels per year on average?’ Ambra and I looked at each other. It’s a difficult question to answer. Does Airbnb count as a hotel?
‘I don’t know, 100?’
‘And how much do you spend per night?’
He filled in the blanks with our answers. ‘Now you’re a young guy,’ he continued. ‘In 30 years do you have any idea how much you’ll have spent?’ He crunched the numbers and circled the total three times with his pen.
‘Now I don’t know about you son, but that’s a lot of money where I come from,’ he said, pointing to the 6-figure sum.
Indeed it was. Admittedly I had never thought about it that way. And I saw where he was going. Buy this timeshare and I could essentially live rent free. Instead of punting the money away in hotel bills, I’d own equity, which I could then sell back for a gain at a later time.
Best of all, instead of merely owning one home, I’d essentially own a piece of all 17 Hyatt Residence Properties nationwide. From Maui to Sedona, from Key West to Carmel, I could live wherever I pleased. And with no blackout dates and unlimited access to Hyatt Hotels, we could convert our ownership to stay in their luxury chains too, like our favorite, the newly opened Andaz property in Wailea.
It seemed too good to be true.
When the presentation was finished the man left to get us a custom quote based on our expected dates of travel. Five minutes later he was back.
‘The numbers look good,’ I told him, ‘but of course, I’d have to think this over more with my wife. I like your Residence Properties in the U.S.’, I told him, ‘but we value flexibility and travel internationally often. I’d want to do some math to see how well our ownership stake converts into our ability to stay in hotels. Can we get back to you by the end of our stay?’
‘This offer is only good for today,’ he said. After that the price would go back to the ‘Anytime Offer’, which he informed us was five times the amount of the normal price. The cheap sales tactic and pressure to buy turned me off.
‘No thanks,’ I told him. ‘But I appreciate your time.’
He was visibly upset, and seemed to feel entitled to close, like a man who paid for dinner and expected a goodnight kiss in return.
He went back to the well, only this time more direct. ‘Like I said fellow, we’re going to get your money anyway. The only difference is with this at least you get some back.’ You learn a lot about someone when they don’t get their way. It’s easy to be professional when you’re winning. The true test of someone’s character is how they act when aren’t.
I was befuddled. Did they really expect people to buy on such short notice?
Even though I lost my opportunity to buy I thought more about the timeshare over the next few days. Was it really my ticket to freedom, or would the timeshare end up owning me?
Something irked me about the idea of being tied into an asset, regardless of the flexibility. I pressed myself for answers.
Nothing gives one as much choice as owning nothing at all. Ownership doesn’t free us, it enslaves us. Had I bought it’s only natural I’d feel compelled to plan my travel based on where the nearest Hyatt is. A part of the spontaneity would be lost. And I couldn’t help but feel a little bitter if, say on a road trip through Iceland there wasn’t a Hyatt available and we had to pay out of pocket for travel when I would feel entitled for it to be ‘rent free’.
I understand I’m particular, even extreme at times. I’m sure the timeshare is probably a decent investment especially for those who would utilize its full benefits (although I assume most buy with good intentions, but then rarely use it, like a gym membership).
The purpose of the timeshare should be to extend one’s freedom. In my personal case it would limit it. And if that’s true for arguably the most flexible purchase one could acquire, isn’t it true of all things? That we don’t really own the things that we acquire, but rather they own us. That every little thing we buy ties us down even further, limiting our ability to go, do and see? (Of course, we don’t really own anything at all; we simply rent it for the duration of our lives.)
For my entire adult life I have chosen to go against the grain, making financial advisors squirrel. ‘You know renting is the worst investment in the world, right?’
I do pay a usurious premium by renting wherever I go, and trust that owning a home would be a more prudent financial decision. But renting gives me something that ownership cannot. Freedom.
By renting I am essentially buying back my ability to live whatever life I want, which is priceless. What good is all that money if you’re stuck paying a mortgage with it? That’s not ownership, that’s slavery.
So that premium I pay is simply a tax to maintain my freedom. It won’t always be this way. I may decide to own in the near future, but if I do one thing is for certain: it will be something with an extremely low overhead, something that doesn’t infringe on my ability to travel, experience and enjoy things in life.
People notoriously do it backwards. They buy a bunch of shit (a home, a fancy car, whatever) and then see how much is left over to do the things they actually care about, you know, the meaningful things that bring them happiness.
The secret lies where few venture. Figure out how much your ideal lifestyle will cost, and then using what’s left over to accommodate your living situation. And the biggest mistake you can make is with the bigger purchases because they’re the one that limit you the most.
I learned this the hard way. When I was 19 I bought an M6 BMW and of course, she was my baby. But she came with a price, the maintenance. Every other month I had her at the shop. And whenever I was away traveling I felt compelled to return home, I had a $125,000 car just depreciating in the driveway.
Selling my precious car was one of the hardest things I’d ever done. But who was I kidding? I didn’t own that car, it owned me.
The goal isn’t to have a mansion with 6 bedrooms and a massive mortgage. You’re essentially trading the excess for your ability to experience life.
To have true freedom you must own two things, your finances and your time. You do that by prioritizing your purchases with things that don’t inhibit you in any way. Because your house isn’t the most precious asset you have, your life is.
Don’t get it twisted.