WCI #314: Loving Your Timeshare with Dr. Cory Fawcett

This is the White Coat Investor Podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with their money since 2011.

This is White Coat Investor podcast number 314.

Loving your timeshare with Dr. Corey Fawcett.

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Matter what happens in the future.

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I know what's wrong with him, right? Next he's going to be coming on and defending whole life insurance or Ponzi schemes or something.

But hear him out. He makes some good points and I.

Think I give him the appropriate pushback.

He needs at times in the podcast. But this is worth hearing. So let's get him on the line and do this interview.

Our guest today on the White Coat Investor Podcast is none other than Corey Fawcett, M.D. and we were just talking. I thought I wasn't going to have to introduce him to you because I was assuming I'd had him on this podcast a couple of times before. But going back through show notes, I don't think he's ever actually been on the podcast. So let me tell you a little bit about Corey. He's submitted a number of guest posts to us over the years. He's been a WC Icon speaker multiple times. But where you probably know him from the Most is from financialsuccessmd.com he is also the author of six books now, most of which are titled the Doctor's Guide to Something, Doctor's Guide to Starting your Practice Right or Eliminating Debt or Smart Career Alternatives in Retirement or Real Estate Investing or Navigating a Financial Crisis. That's not what we're going to be talking about today. We're going to be talking about his sixth book which is A Guide to Loving youg Timeshare. Corey is a successful surgeon. He had a full career as a surgeon and during that career also built up a portfolio of self managed rental apartment buildings. So he's also a direct real estate investor. He's a big kind of anti debt proponent and apparently a big proponent of timeshares, which I didn't know until he wrote this book. But Corey, welcome to the White Coat Investor Podcast.

Well, thanks for having me. We'll see though if we're done. If I really thank you for having me, we'll see what happens with me.

As I told you before we started recording, I need to warn the readers here. Right. Most of the time I'm not all that confrontational with guests. But I know Corey well. I know he can take it and I'm really going to ask him to defend some of the positions he's taken in his book on A Guide to Loving your Timeshare, which you can pick up I assume on Amazon, right?

Yes.

You can certainly get it on your website.

Yes.

If, if you're interested in reading more about this. All right, so Corey Timeshares, you know almost everybody in the finance space, bloggers, authors, podcasters, whatever will tell you. Don't buy a Timeshare. Timeshares are stupid. It's people taking advantage of you. It's a hard sale to a crappy product. It's a product designed to be sold, not bought. You know, there's entire websites dedicated to people who would like to get out of their timeshare, who would sell their timeshare for a dollar if they can only find somebody to buy it. And yet here you are saying timeshares are a great way to vacation. So tell us why you feel differently about timeshares than the common wisdom out there about them.

Well, it's interesting that you use the word wisdom when you said that. Common wisdom, which is not really what's happening. I've been a timeshare owner and loved it for over 30 years. I've been vacationing. I bought mine at the end of my residency, and I've been vacationing with timeshares ever since and love them. And I hear so many things that are negative. And you just listed a whole bunch of them that you hear all the time. And many of the things when I hear people say them aren't even correct. And I kept saying, well, why would they say that? Don't they know better? Don't they know? And it turns out they don't know often. Many of the people who make these kinds of statements haven't ever owned a timeshare. They just heard somebody else make that statement and they're passing it on. And that's been what my experience has been. There's a chapter in my book where I went around interviewing people at the swimming pool at three timeshares in a row that I went to. And when I interviewed them, I asked every single one of them the question, do you feel you got good value for your money when you purchase your timeshare? I was very surprised that I got a 100% said yes. Not one single person could I find at the timeshare enjoying their time who thought that it wasn't a good deal for them. And that's been my experience as well. And so I kept hearing these people say these things. For example, here's a good one. Who wants to own somewhere. You have to go back to the same location every year for the rest of your life. Well, that's not even true. I've had my timeshare for 30 years. I've never vacationed at the timeshare I own. That's the most expensive way to use your timeshare is to go to the one you own. So I don't do that. I'm Kind of timeshare hacking and figuring out the ways that I can get the most out of it. But I kept hearing this over and over, and I kept saying to myself, yeah, but that's not true. That's not true. And then I thought about that book, the Lorax. You read the Lorax, Dr. Seuss, and they're chopping down all the trees, and he stands up and says, yeah, but who will speak for the trees? And I kind of thought that about the timeshare. Well, no one's speaking for the timeshares. And so I decided I'd write the book. And as I did the research, trying to figure out why all the negativity, I. I found that there's two recurring problems that happen in the timeshare industry, and I think those are the source of all the problems. And that's the wrong people buy timeshares, and they don't come with instructions, so you don't know what to do. And so if you're the wrong person, and in the book I list out here are the actual criteria to be a happy timeshare owner. Those are not the criteria that the timeshare salesmen use to sell a timeshare to you. They pretty much, if you're breathing, you're married, you're over 25, and you could afford the payments, I'm going to sell you a timeshare. None of those are the right criteria to be a happy timeshare owner. And if you are a happy timeshare owner, you meet those requirements and you own a timeshare and you learn how to use it, you would find that it's a real bargain. If you don't meet those requirements and you don't bother to learn how to use it, then you're going to be like this guy I met. I was at a book signing a few months ago, and the guy came up and says, yeah, I want a timeshare. I've had it for 15 years and I've never used it. I'm thinking, what a waste. Why would you? It's like, I bought this cool boat and I parked it in my driveway, and I've never taken it to the water yet for 15 years. It's like. And if you do that and you have to keep making payments, you have to keep paying your maintenance fees, there's some ongoing expense with owning it, and you never use it. You become very unhappy. And then you begin spreading that rumor about, oh, how terrible this is. Look at this. It's costing me all this Money and I never get to use it. Well, whose fault is that?

All right, let's go back for a minute. You talk about the criteria for being, you know, a happy timeshare owner. Who are the people that should buy these, in your opinion?

I have seven criteria that I think you should have. The first is you need at least three weeks of vacation a year. Okay? Because when you own a timeshare, it's like owning an rv. If you own an rv, you need to use some of your vacation time with your rv. If you don't have enough vacation, let's say. And a lot of people who buy timeshares only have two weeks of vacation, that's a common amount of vacation throughout the country is two weeks. If you only have two weeks and you're going to go to a family reunion this year and your class reunion, you're going to go visit your parents, you don't have any vacation time left for your timeshare. And so it didn't get used. You shouldn't have purchased a timeshare because you don't have the bandwidth to fit this into your schedule. So at least three weeks of vacation, more is better. You need to have the money to make upscale travel plans. Okay? If you are going to use a timeshare and you have a family of five, that means every time you go someplace cool, you need to buy five airplane tickets, you're going to need to rent a big car, you're going to need the time off from work. And when you get there, you're going to do things. If your timeshare in Orlando, you're going to buy six days of Disney tickets. So if you don't have the money for that, you're not going to use your timeshare. And a lot of people gripe about that. They thought they were going to do this. The timeshare itself is a good bargain, but they don't have the money for all those other things that are going to happen on that vacation. And they want to go camping because it will be a low cost thing for them. And so they don't have the income to, to vacation in the style that you would do when you're using your timeshare. Now, you don't always do that. I mean, I've gone to Las Vegas on a timeshare and I spent the week hiking in the Red Rock Canyon, okay? So that was a very low cost use of my timeshare. Not like go to Orlando and go to Disney every day. That's a high cost use of Your timeshare. Another one is you gotta be able to pay cash. Most of the complaints about people who bought timeshares, they bought them on the primary market at a very high price and they had to borrow money to do it. Man, you already mentioned I'm an anti debt guy. But you should never be borrowing money to buy luxuries or vacations. You need to be a flexible person. This is a real key to timeshare bliss. If you are the kind of person who has to vacation on a particular day at a particular location, you're probably going to be unhappy as a timeshare owner. Because if you wanted to go to Lahaina in Hawaii on June or let's make January 15th, the odds of you finding a spot there are way lower than just getting a hotel. And people think about, you know, there's lots of hotels, there's not as many timeshifts. But if instead you said, why did I want to go to Lahaina? I wanted a warm tropical beach. If instead you said, where can I go for a warm tropical beach? You might get 200 options of nice warm tropical beaches all over the world. And you could just go to a different one.

Especially if you can go any week in January.

And you can go any week in January. So if you just said, I want a tropical beach in January, you'll have lots of choices. If you say I want this beach on this day, your odds of being happy with that choice are going to be low. And so you got to be a flexible traveler. You can't just got to go a particular place. You have to have a style that you like doing upscale vacations. So for instance, take you, you like slot canyon work.

Okay, Work's a good description of what.

You do once you're in a slot canyon.

That's not really. If that's the kind of vacation you want to do most all the time, then that's not usually going to fit into timeshares. Now there are some timeshares reasonably close to some slot canyons. But I think you would be unhappy if the bulk of your vacationing wanted to be that or if the bulk of your vacation was using your rv. If those are the ways you want a vacation, then you shouldn't be looking at this style. You got to own it for the long haul. This is kind of like buying a house.

Well, let me pause you before you move on. What style of vacation should you like if you're going to buy a timeshare? You're talking like an all inclusive resort style. Vacation or a sit on the beach style vacation or what exactly do you think should be your ideal vacation? To maybe be happy with the timeshare?

You should like to go to a resort that's kind of the. A cool thing. Because one of the cool things about the timeshare is you end up getting a nice place with lots, usually lots of activities and amenities at the resort. Okay. If that's the kind of thing you like, then you should be pretty good. But you can go to the beach, you can go to the lake, you can go skiing, you can go to the mountains. I mean, they're all over the place, all different kinds. There are all inclusive places. I don't go to all inclusive places because I'm kind of a cheapskate. And so all inclusive places charge you a big fee to use all their facilities. But I don't use all of their facilities. And so I feel like I overpaid for the few I use. I'd rather pay for the ones I'm gonna use. So I kind of avoid all inclusive things in general. But that is an option with timeshares. There are options in the all inclusive. So they really have. In fact, you can search for these things. If you want a skiing vacation, you can search for just that and it'll show you all available ski vacations. You want to go to a lake, you can do that. You want a beach. Some people, you know, if you like to, you can get one in downtown San Francisco, downtown New York, New York City. And that's a completely different kind of vacation than going to Hawaii. But you've got to like kind of going to the resort concept, I think, because that's what you're going to do when you get your timeshare. You're going to kind of be at a resort and some people just don't go for that. There are camping people, there are people that only like to visit their parents for their vacation. I just talked to a doctor who never likes to take vacation because they hate that feeling when they get back home and they're not caught up and they got to do all this stuff to catch up, and so they don't take a vacation. And they said it got so bad that their boss forced the manager to just book a vacation for them every quarter because they weren't taking their vacation time. And that person probably shouldn't own a timeshare. That's not the kind of person that should be here.

Did we hit all seven of them? How many have we hit now?

There's two more you have to own it for the long haul. Just kind of like buying a house. You shouldn't buy a house if you know you're only going to be there for a couple of years. You want to buy a house when you know you're staying someplace for a while. And this is same with the timeshare, because once you get into it, you need to learn the system and there's a little time to do that. So you're going to invest a little bit into this process and you should be there for the long haul. If you just say, I'm going to own a timeshare for a couple of years, get some cheap vacations, then I'm going to drop it. Don't do that. You should be doing this, this is a long haul move. And then you need to be your own travel agent. You have to be the kind of person who's willing to look for where do I want to go? If you book your own airplane tickets, if you book your own housing. Now when you travel, that's consistent with this. You'll like that. It's kind of like if you are the kind of person who loves travel hacking, credit card hacking, house hacking, that kind of stuff. Oh, you'll love timeshares because there is so much hacking you can do in this system. In fact, when I started writing this book, I learned a whole bunch of hacks that I wasn't using because I interviewed people and they were giving me their hacks. Oh, I didn't know that one. That's good. But I already had enough hacks to keep me happy.

So that's a good segue. We've talked about the people that it's right for and let's say somebody's been listening to your list of seven items and unlike me, they don't want to spend a whole bunch of their vacations camping or doing slot canyons or at the lake or whatever. And they're still interested at this point. So you also said they have to know how to use it. They need the operator's manual. Give us the brief version of the operator's manual. What do you mean by that?

Okay, so you don't need an operator's manual at all if all you're going to do is stay at the one you bought. Okay, if you are going to buy a timeshare and some people do this, not me. Some people do this, they buy a timeshare because there was the exact spot they wanted to vacation all the time, and there's a particular beach and it's nearby their house and they always want to take their family there. They don't need an owner's manual. They just show up their vacation every week and that's that. But if you want to make trades and go for value and do the hacking, you need to join a group. The trading group I use is called RCI Resort Clubs International, I think is what that stands for. There's another one called Interval international. There's over 4,000 timeshares in the system to trade with. And you got to get familiar with all of the buttons on their website that you can poke and all of the ways that your timeshare could be traded. And so most people don't learn how to use their VCR or their DVD player. Okay. They don't bother to figure out what does this button do. And if you're one of those people, you're going to have a hard time figuring out all the little hacks you can get because you haven't looked at everything on their website. So basically, if you just click around and do the website or you join a timeshare users group, or you ask around the people at the pool, when you're at a timeshare, what do you do? You'll begin to learn. There's no actual owner's manual out there. That's the problem, I guess. My book is kind of an owner's manual now. There's two chapters on how to actually use your timeshare and all the hacks you can get. But here's the cool thing about the timeshare. Most people think if I own a week, that means I can use a week. And that's not true. Once you own a week, you're a member of the group. It's kind of like being a country club member. Once you're in, you get all of the things that they have at the country club available to you. But if you're not in the country club, you don't get any of those things. And so that's what timeshares is mostly like. That's what you gotta learn. What are the things that are available to me? And so I own one week and I trade it for about seven, eight weeks of vacation a year. Okay? And so most of the people who sell the timeshares don't know that you can get more than one week out of your week. And so that is kind of a really key thing to know because, for instance, it used to be your timeshare was a straight across trade. I own a timeshare, I want to Trade it for another one. It was just a straight across trade. As long as their timeshare was worth a lower ranking than yours, you could have it. And then about a decade ago, they changed the system and they changed it to give your ranking some points. So if you changed, if I got a 35 point timeshare and I trade it for a 10 point timeshare, that gives me 25 points of change that I can use again to trade another time. And so looking for those bargains can give you lots of extra trades. That's one way to get the trade. And those bargains usually aren't low because it's a low timeshare. I've traded into five star resorts for three points. And the reason they're trading them for three points is because they're building a new timeshare there and they want to get people in there to sell them some timeshares. Okay? So they're putting their price way down to three points to trade into theirs. So you'll pick theirs. And so you go there for the three points but never go to their meeting. They'll try and get you to come to the meeting for the timeshare, but you're on vacation, so don't go to those meetings, just skip them. Take your phone off the hook in the room because the only people gonna call you on that phone is the timeshare guy trying to sell you a timeshare. And you don't wanna talk to him because that's not where you want to buy your timeshare from. So learning all these hacks, for instance, once you're in the system, you're allowed to rent some excess inventory. And so you could rent a nice place for 200 bucks a week once you're in the system. Where do those come from? Those are unsold units. Those are units that people traded for something other than a timeshare. You can trade for a cruise. If you did that, then that's an unused timeshare that's sitting there that they could rent out for something but never trade for a cruise because that's a bad exchange rate. It's kind of like airline miles. You get your best deal if you trade for a flight, but they'll let you buy a TV with your airline miles, but you don't get a very good trade for that. So you want to trade for timeshares. So those are some examples of ways once you're in the system, you're a member and you get all kinds of benefits. And you could literally with One week ownership vacation all year long at timeshares, once you're in the system and can play with the hacking.

All right, I think I've given you the opportunity to kind of explain the main ideas here and how to use these. Now I'm going to ask you to defend them. People go to sell timeshares and discover that they're not worth anywhere near what they paid for them. And you're a successful real estate investor, you understand how this works to actually make money in real estate. But when I look things up, such as, you know, a real famous one's, Worldmark, you know, where you buy points and you can use them at Worldmark resorts all over the place. And you pay $2 or $3 per credit. And if you go to sell them, the resale value is 25 to 40 cents per credit on the resale market. And you look at these other places, people trying to sell their timeshare, they're listed for a dollar. They basically just want you to take over the annual maintenance fees.

Right.

Why would you buy something that is going to crater so much in value?

You wouldn't.

Especially as some sort of a long term hold.

You wouldn't. That's why you never go to those timeshare spiels, because you don't buy the one that they're selling there, you buy the one for a dollar. Exactly how bad will that dollar depreciate on you? And when you get done with it, you're going to get rid of it for a dollar. Or maybe you sell it for $2 and you doubled your money. You don't buy them from the timeshare salesman, you buy them on the secondary market. So there isn't the issue of it's expensive. When people say, oh well, timeshares are so expensive and there's this huge depreciation. Well, that's because you don't know how to buy it. If you're buying them at retail price from the salesman, you're getting hosed. I interviewed a guy when I was doing the book and he said he was in Hawaii listening to a timeshare and they wanted 95,000 bucks for his timeshare and they'd finance it at like, I don't know, 17% interest or something like that. And he pulled out his phone and he says, well, yeah, but this same timeshare is for sale on eBay for $2,500. Why would I pay you $95,000 when I can get it for $2,500? And that's the right answer. You wouldn't pay $95,000 for that. You should buy the $2,500 one, and then you're not worrying about depreciation. And you got to remember, too, timeshares are not real estate investments.

But you're still in a partnership or a business with people who run their business that way. I mean, these are not the. My favorite folks to be in a partnership with that run that sort of a business, right?

That's correct. And that's why you never go meet the partners. You can stay. It's set up so you could completely stay away from those guys. But here's the thing. Everybody who sells stuff sells it at a higher price than it should be. Everybody who buys stuff wants to pay a lower price than the seller is offering. That works in every single sales situation. Every piece of real estate you buy, the seller wants this much, and you want to pay this much. It always works that way in timeshare sales, they want their profit. At boat sales, they want their profit. Car salesmen, they want their profit. If you know what you're doing buying a car, you can pay a lot less than the car salesman is selling it for. And that's the way you should treat your timeshare. Treat it like a purchase that you're trying to make on the cheap. You want to make a good purchase.

But people are not swooping in there and buying up all these timeshares for a dollar. They stay, they're listed for a dollar for a long time.

That's true.

And so there's these people that want out of it. They don't want to pay their annual maintenance fees, but they can't find anyone to buy their timeshare even for a dollar. I mean, what's your response to that problem?

Most of those people in that situation never should have bought the timeshare in the first place. That's why they're selling it. They say, why are you selling this? Well, because I never use it. Well, why did you buy it? Well, I thought I would use it. So if you take it back a step and you can prevent the wrong people from buying, we wouldn't have a flood of those things because the right people would own them. But the wrong people do own them. And so.

But. But eventually you gotta leave it to your heir. You've gotta leave it to your heir.

Eventually, my kids are gonna love it.

They may not want it, and they can't unload it either.

Right.

I mean, I had this discussion with my parents recently. They own a few World Mark points. And one of my sisters had some World Mark points. And we were basically, they're like, who wants these? And nobody wanted them. They got six kids. None of us wanted these World Mark points. And we had to convince the sister that already had some to take them.

But here's the thing, you guys should have taken them. And then all six of you could have been going on a vacation every year for almost nothing because you guys didn't know what you could do with owning that thing. There's no owner's manual. The people don't know what a gold mine they could hold in their hands. And when they don't know that, they think the only thing they think I'm going to have those maintenance fees to pay. But the thing is the maintenance fees are cheap. Look at mine. Mine are. I wrote that down here somewhere. $733 a year is my maintenance fee. Okay?

That's for a one quote unquote, one week timeshare.

One week timeshare.

And what about you say you trade into eight weeks worth or whatever? I assume you're paying some other fee when you go, right?

Yes, I have the $733,000 plus I am an RCI member. I have to pay a fee to be part of that. They've got employees and stuff to manage this brokerage of trading timeshares around. That's $80 a year. So my carrying cost just to hold that is $813 a year. If all I did was go to one timeshare a year, I could stay at a five star resort for 800 bucks a week. That is a bargain. That's the worst case scenario for owning my timeshare is it would cost me $800 a week.

Did you buy yours on secondary market or did you learn that lesson?

I did not.

So what'd you pay? What'd you pay for it?

Originally I paid $16,000 for mine originally. I didn't know there was a secondary market. This book didn't exist when I was. And there was no Internet and I didn't know anything. You know, I got roped in just like most of the people who are unhappy. Buy the $25 free buggy ride. If I just go to this little meeting for a couple hours, I could get this free buggy ride around New Orleans. I didn't know better. I went for the free buggy ride. I was going to tell them no, but my wife said sounds good to me. And I couldn't believe it. And we bought it and we paid Full price, which was $16,000 back 30 years ago. So I'm paying $813 a year just to have it. If I make a trade, the trade costs $289. Okay? So if I made seven trades this year, the total cost of my membership plus RCI, my maintenance fee, RCI membership and those trades is $2,836, which comes to $405 per week of vacation. So I can stay at a nice resort for less than the cost of a cheap motel. That's a pretty good bargain. So when people are talking about these maintenance fees that are high, it's almost always. That's not the issue. The issue is they're not using their timeshare, but they have to pay a maintenance fee. The issue is they're not using it. If you were using it, it's a bargain. If you don't use it, no matter what you paid for it, you're getting screwed.

Yeah, well, even if it's, you know, even if you're just trading it for one week, you're spending $800 a year on a one week vacation. I mean, I can go to Roatan, Honduras and rent a house on the beach for 150 to 200 a night. You know, that's not that much more than $800 a year. And I don't have to have any of the hassle or have to build the $16,000 payment up front. You know, I can just Airbnb it.

I don't have any hassles. Airbnb. Let's Airbnb it. Okay, let's talk about that. We go to a bunch of financial meetings to talk about all this money you can make on Airbnbs. Well, where are they making that money from? They're making that money from charging it from the people who are staying in. So I know when I was interviewing people, I met somebody who turns their house into an Airbnb. They get $350 a night for their house, and when their house is renting, they go to the local timeshare that's nearby for $80 a night. So they stay $80 a night at their timeshare, and it's free to stay at their timeshare if they use their own points. But if they don't use their points and they just buy some time at their timeshare, once they're in, they rent their house for 350 as an Airbnb and they stay at the timeshare, and their timeshare is nicer. Than the house because it comes with all the amenities. The house is just a house. It doesn't have any activities for the kids. It doesn't have the pool, it doesn't have all those things. And so there are places you can go cheaper. You can go to Las Vegas and you can get some greatly subsidized housing and maybe pay 30 bucks a night for a nice place to stay. But you'll still just be staying in a hotel room, which is, you know, the timeshare is more like a suite. And I love to stay at my timeshare when I go to a meeting. Okay. I had to go to a weekend business meeting down in Los Angeles and I said, okay, well what timeshare could I tie into that? Because I'm already going to get to deduct the trip, right? So I'm getting there for not free, but for a good price while I'm there. What if I just stay in a timeshare for a week? So I looked around, I found a timeshare, I got the timeshare and I stayed there for a week. And it was like a two bedroom place with a kitchen and fireplace and living room. Really nice. It was on a lake and had canoes to just go grab one and go out on the lake. It was a really nice experience for that week. Then I went to the conference and I stayed in the hotel at the conference, which was a room with a bed and a chair and a bathroom. And that cost me $250 a night plus $50 a night to park my car at that place. One night there was about what I paid for the entire week at the timeshare just a couple hours away. That was a whole lot nicer experience. So yes, you can get some cheap places, but usually your experience isn't going to be as nice as being at a resort. Usually when you get an Airbnb, you just get the place to sleep. You know, you don't get all the things that come with being at a resort. Sometimes you can. And yes, you can find places that are cheap also. But you said, and you don't have to deal with all the hassle. I don't really have any hassle to deal with. I heard one person when I was interviewing them on the beach. On the beach, at the pool. They said timeshares are the passive is passive vacation home ownership. You own a vacation home, you don't have to keep up the pool, you don't have to take care of the hot tub, you don't have to go to the same place every time. And most of the people that I know who own a vacation home spend half of their vacation fixing stuff at their vacation home when they get there. In fact, they sometimes take tools because they're going to do a particular project when they get there, and they kind of blow their vacation working on their vacation home. But when you go to the timeshare, you don't have to do any of that. Somebody else takes care of the pool, somebody else keeps the hot tub nice. You just show up, enjoy it, and leave.

Well, I think we started that discussion. It went all kinds of good places, but I'm going to bring it back to where we started it, which is this problem of someone who actually wants to get rid of it and can't.

Okay, selling. So there's several ways to sell your timeshare. The easiest way is to call the resort and ask them if they'll take it back. Many resorts will just say, sure, I'll take it and you're done. Okay?

Meaning you're selling it for zero.

You're giving it to them, you're giving it to them, but hopefully you bought it for zero or close to zero and you've used it for many years and now you're just going to give it away. Fine. Any resort that you own from that is still building, they're interested in getting that back from you because they're going to turn around and try and sell it for $80,000 to somebody, okay? So they have an incentive to take it back. If you own at a resort that is not still expanding anymore, they're done with that project, they're not going to want it back because they don't have a system set up to sell timeshares on site. So there's a reason to. When you bought your timeshare for close to zero, you bought it in a system that is actively growing, not a standalone timeshare, because the growing ones have that sales force all set up. And so if you said, hey, I don't really want this timeshare anymore, I've used it for 20 years, would you take it back? Those guys may say, yeah, sure, we'll take it back, and you just give it to them and you're done. So if you bought it right, you didn't lose anything by just giving it away when you're done. What you had was 20 years of membership in the group. Another way is ask around a lot of your friends who own timeshares, and you might not know that you have friends that own timeshares because people bash timeshares so much. A lot of people don't want to bring it up in conversation because, like.

Whole life insurance, that way they don't want to admit they have it.

Or I'm a landlord, you know, if I get into a conversation about and I say I'm a landlord, oh, man, do I hear all the crap about being a landlord, what that's like. But if I say I'm a doctor, oh, I get all the praise about being a doctor, you know, So I don't really want to bring up usually in casual conversation that I, that I'm a landlord or that I own a timeshare because I don't want to listen to all of the stuff they're going to tell me about how horrible that is and how they'd never do it. So you may have friends that have timeshares and you don't know it. And if you find one of those, a lot of those guys would be interested in another week, especially if they haven't read my book, because they think they need another week to get another week of vacation. You really only need to own one week because once you're in the system, you can game the system for lots of vacation time. But there are a lot of people who think they to have one more week of timeshare, I need to buy one more week of timeshare. And there's a couple examples in the book where people found a friend, oh, you have timeshare, I want to get rid of mine. Would you be interested? And they made the deal for 500 bucks, a small token thing to trade it off. You can put an ad in a local paper or something or Craigslist and see if you find somebody that wants that. And then there are some companies that are designed what you just mentioned. You see all these for sale. They're usually at a resale group. That's a harder place to sell because you are one in a thousand of people who want to sell a timeshare. But there are ways to get rid of it. But you can't be saying, I paid $80,000 for this, I want to get $70,000 for it. That's not going to happen. If you made the mistake of paying $80,000 for the timeshare instead of 2,000, you're going to be very unhappy when it comes time to get rid of the timeshare for whatever reason. And there are people who need to get rid of the timeshare at a stroke. I'm never going to be traveling Again, I don't have any kids to give it to. I'm ready to get rid of it now. It came full cycle. I bought it, I've used it. Now it's time to dispose it. Same happens with a boat, a car or a motorhome. Eventually you're going to get rid of it. And there are ways to get rid of it. It's not as easy to get rid of. It's kind of like trying to sell your used car. There's a bit of hassle in getting rid of it and that's going to be part of the deal. Thus the reason you need to be a long hauler. So you're not going to be getting rid of it for 20, 30 years is the idea. You're going to use this for a long time and by the time you do get rid of it, you already sucked all the value out of that thing. And it's okay to just give it away, especially if you bought it. Right?

So it's interesting. I saw an expose recently.

I don't know if it was a.

Video or an article or what it was, but it talked about all these terrible sales practices. These people sell on timeshares for $80,000 and they're licensed to lie and they can basically tell you anything they want.

To get you to sign on the line.

But the other part of the expose was about these timeshare exit folks that take your money to help you get out of a timeshare and then just disappear, close the company and run away with your two or three thousand dollars you paid them to get out of your timeshare.

That's right.

So I'm taking it you don't think those sorts of companies are worth using to get out of your timeshare.

Never, never, never, never use a timeshare exit company.

Yes.

There was a lawsuit and I mentioned it in the book and actually detailed what happened there, that a company was sued from timeshare exit company that said we give 100% money back guarantee if we don't sell your timeshare for you or get you out of your timeshare. And they weren't doing things for people and they weren't giving the money back. And they lost $3 million in this lawsuit and were told to change their ways. Timeshare exit companies are the people who call you cold calls and say, hey, are you happy with your timeshare? Because they know most of the people that bought a timeshare didn't qualify to own the timeshare and they're not that happy owning the timeshare. And they can get a lot of hits for that. Never, ever sell your timeshare to somebody who called you about it. You want to sell your timeshare with reputable companies and you contacted them and you can check them out on the Better Business Bureau and stuff. Timeshare exit companies do. Some they're just as shady as the people who were selling it in the first place. In telling you things that I guarantee will get rid of your timeshare in this amount of time, or they'll say, stop paying your maintenance fees. Well, if they're telling you to do something unethical in the beginning, you don't want to use that service. You made an agreement, you'd take this timeshare, you'd use it, you'd pay these fees as long as you had it. That's your agreement. You should honor your agreement. And when somebody comes up and say, hey, I can get you out of that agreement, that's probably not a good thing. I remember a medical deal I had like that where we developed a business. The lawyers said, oh, this is ironclad. No problem. Nobody can. So one of the guys left and took all of our stuff and started his own. Wait a minute, you can't do that. So then we hired lawyers that said, well, we can get him for that. And he hired a lawyer that says, hey, I can get you out of that. And now we're all paying lawyers to get us. But yet, if we go back, we had an agreement and the real bottom line problem was there. You're not following the deal. This is what we said we would do when we became partners in this. And if you have somebody telling you to do something unethical like, oh, just quit paying the maintenance fees, that's going to turn out bad for you, not for them, because you're going to get some sort of a hit for being irresponsible with your money. It's kind of like, oh, you could just quit making your car payments and keep your car, that's not going to turn out so well for you. But the guy telling you that, no problem for him. So just stay away from timeshare exit companies. There is legitimate ways to transfer your ownership to somebody else. Don't go down those roads. A big warning, and I put that in the book, too, to watch out for that.

Well, let me see if I can sum up what you're saying here. You're saying if you buy it right, which means a place that can be exchanged as part of a growing network and you don't pay full value for it. You're buying it essentially on the secondary market. And you're this type of person that has the flexibility and the funds and the time off to be able to actually use it, that this can work out right for you. What percentage of timeshare purchasers do you think are represented by that ideal?

I have no idea how to answer that. I've never taken a poll. But my poll as I walked around the pools for three weeks was, I would have said it's 100% because everybody I talk to loves their timeshare. But I know there's a lot of people at home that's not.

But how much of that is people trying to justify their decision. Right? They're trying to justify their decision, plus they're only halfway through it. They've never tried to get out of this timeshare either.

This is true. And the justifying their decision may be a part of it, but I'm not trying to justify any decision. I love this thing. I'm having a great time with it and I'm teaching my kids how to use it and they get to use it too. And it's going to be there someday. And even if they each took only one vacation a year, it's a deal for them. So there is some of that. Interestingly, I ran into a guy at my timeshare when I was doing those interviews who rented the place. He's not a timeshare owner.

He.

He just happened to be at the pool because he got it on hotels dot com. Somebody rented out their timeshare a week instead of using it. I said, well, tell me about your time here. Oh, this is a great place. I'm paying $319 a night for this place and it's really nice. This is like staying at the presidential suite at a hotel. I love it. This is super. And then I told him, well, I'm paying $70 a night. He wasn't this happy. What do you mean you're paying 70? Then we talked about it a little bit. As an owner, I'm here $70 a night, but you as a renter are paying $319 a night for the same place. And so it doesn't take a whole lot of convincing to convince yourself you did a good thing. Once you learn how to use the system, if you don't learn how to use the system, you could be one of these people who's pretty unhappy with it. And yeah, you need to convince yourself that what you did was okay. But a lot of those people, a lot of those people have gone through the selling of their timeshare because they own more than one and they've gotten rid of a few of them. And those people, everybody I talked to who had gotten rid of some didn't have any problem getting rid of it. It didn't happen overnight. I recently sold a car and it took a while to sell the car. It didn't just happen overnight. There's ways to get out of it and it's not that big a deal. But there are lots of people trying to get out of it. That's true. I'd love to have some laws that reined in those salesmen so they weren't selling this to people who should never have purchased it because you can guarantee they're going to be unhappy.

But without those people, what you're doing it may not be possible.

That's true. Without people buying new cars, none of us could buy used ones. Without people leasing cars, none of us could get that nice two year old car that's only been leased for a couple years and they turned it back in to get another one. There's always going to be those guys. There will always be people who didn't read the book or didn't know that there is a secondary market. Same thing with paying your taxes. Unless you pay for somebody who knows how to do the stuff, you may be missing a lot of things you could have got because they hide them buried in a 7,000 page law that it's hard to figure that stuff out. People don't make those things easy for us and I wish they did. It'd be nice if you didn't have to be in the know to pay the right amount of taxes. You know, it'd be nice if you didn't have to be in the know to get your timeshare correctly.

Yeah.

Well, Corey, you've done a fine job defending your book. For those who are interested in reading more about this, for getting the manual on not only buying correctly, but using correctly your timeshare, check out A Guide to Loving youg timeshare by Dr. Corey Fossett. Corey, it has been a pleasure to.

Have you on the podcast.

While I'm surprised we've never had you on before, it's been great to have you here. Thank you so much for sharing your wisdom and your experience with the white coat investors.

Thanks for having me. And now you should have me back because then you can say I have been there before.

See, it's a great idea. Thank you Corey.

All right.

I hope you enjoyed that.

Corey is fun. I like Corey. I've known Corey for many years. His post career work is not all that dissimilar from what we do here at the White Coat Investor, but he does a good job of it and so we like to help him to reach more people when he can, even if he's talking about a controversial subject like timeshares. Now I'm not going out to buy a timeshare. Corey has not convinced me that this is the way I'm going to vacation, but he's also convinced me that this can work for some people. And if you're one of those people, knock yourself out. Buy it on the secondary market, make sure you pay the right price for it, make sure you get the right kind of timeshare, and of course make sure you're actually going to use it and use it in the right way to maximize its benefit. And you too might be one of those people sitting in the pool happy with your timeshare purchase.

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