Wayne Dictor, president of Dictor Financial, LLC, has been helping people invest their money for the future and plan for their retirement for nearly 40 years. He is also one of the most well-known LGBTQ allies in Central Florida, having been very involved with the Orlando Gay Chorus, Orlando Fringe and even managing the investments of many of Watermark’s employees.
We chatted with Dictor and asked for a few tips on how to get started investing if you are new to the game, but first how do you know when you’re ready to begin investing?
“If you’ve got the money and you have the desire, you’re ready,” Dictor says. “A lot of people have the money but don’t have the desire. They say they want to live in the moment. You can live for now and still prepare for the future. When are you ready? Simply put, you’re ready when you realize the benefit to putting money away for some time in the future.”
Starting off
“In the very beginning, before you make your first dollar investment, I give my clients an extensive budget page that they use to list every single thing that they buy in the course of a month,” Dictor says.
And Dictor means everything. The budget sheet he gives to his clients includes everything from rent, electricity, water and gas to car insurance, food, grooming, even those weekly Starbucks stops.
Dictor gave this example: You get two Frappuccinos at $6 a piece at Starbucks every week. That’s roughly $50 a month for Frappuccinos. Over the course of 25 years, you’ve spent more than $14,000 on Frappuccinos at Starbucks, but if you put that $50 a month for 25 years into a retirement plan you’re looking at a nice little nest egg.
“This is truly part of investing. You don’t know what you can invest until you know what you have,” Dictor says. “I think one of the most important things a novice can do is know what they have on a monthly basis as far as income is concerned and to know what they are spending, then they can determine whether or not they can save, or save even more when trimming back on some things.”
Reserve income
If you are just starting to get into the investing field, Dictor says you need to make sure you have enough income set aside for a rainy day.
“I tell people before you make the plunge into the investment field, you should be sure that you put reserves away in the bank. People have probably gotten great experience with this over the last year because of COVID,” he says. “At least six months worth of income at minimum should you be laid off, lose your job for any reason or any kind of crisis occurs, so when you do start investing you don’t necessarily have to go into your portfolio when emergencies come up.”
Retirement plan
“If you have an employer that provides you with a retirement plan, whether they are matching or not, always take advantage of putting money away for retirement,” Dictor advises. “As little as 5% to 10% of your income if you can afford to. Often times companies will match up to 5% of what you put away, but even if they don’t, make sure you are taking advantages of your company’s retirement plan.”
If your job doesn’t offer any kind of retirement plan, look at investing in a Roth IRA.
IRA stands for Individual Retirement Account, and the big difference between a Roth IRA and a traditional IRA is how they are taxed. Roth IRAs are funded with after-tax dollars; the contributions are not tax-deductible. But once you start withdrawing funds, the money is tax-free. Traditional IRAs are generally made with pretax dollars; you usually get a tax deduction on your contribution and pay income tax when you withdraw the money from the account during retirement.
Dictor recommends going the Roth IRA route. “The Roth IRA is the best thing since sliced bread,” he says. “Especially for young investors.”
Invest in what you know
When you are starting to consider where to invest your money, Dictor says first look at what products and services you use every day.
“Do you have an iPad or an iPhone? Do you have a Surface Pro? When you buy these things, do you shop for them at Best Buy or do you go online to Amazon? If you use a product and you’re satisfied with the product then invest in the company,” he says. “Reap the rewards from the success of that company. If you invested money in Apple back when all they had were those old Macintosh computers and you hung on to the stock, you’d have a fortune by now.”
But what if you can’t afford to buy a share of stock in a company you use and support? A share of Apple or Microsoft will cost you a couple of hundred dollars. A single share of Amazon or Google will set you back several thousand dollars. Dictor says that starting off with mutual funds will get you into the investment field without taking on as much risk as owning a single security.
According to Investopedia, a mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds or other securities. Mutual funds give small or individual investors access to diversified, professionally managed portfolios at a lower price.
“You may not be able to afford a share of Amazon stock but you can take that money and invest in a mutual funds which will give you diversification of different stocks. You’ll get Amazon and Apple and Microsoft, but in a mutual fund you’ll get portions of a share and diversify your portfolio,” Dictor says.
“It also reduces your risk,” he continues. “If one stock goes down dramatically not all the stocks are going to necessarily go down so buying shares of a good large cap growth mutual fund will give you exposure to many of the companies that you buy the products from.”
If you do get into buying individual shares of stock, Dictor says don’t fall in love with one particular investment.
“If it’s not working, especially in a single stock category, if it’s not giving you the reward, get out of it,” he says. “Make a change. There are tens of thousands of stocks out there and you can buy as many of them as you want. Don’t put all your money into one.”
Investing apps
Stock purchasing apps have given the average person the ability to play the market, this carries with it some benefits as well as some risks.
“I think the apps are interesting because they make accessibility to research and information of investing more available. Some people don’t have the time to get on the phone and call someone like me,” Dictor says. “People can get knowledge from these apps and knowledge is power, and now they have the power to invest right there in their hands on their phone but beware of the risks. I could learn about performing an appendectomy on the internet, but I wouldn’t lay across my desk and try to perform one on myself.”
But if you are going to go that route, Dictor says to be very careful.
“I think because there is so much information out there, I think the apps overall are a plus, however if someone is going to use them you need to realize that there are certain risks involved in investing and you should never ever invest more than you can afford to lose,” he cautions. “You don’t bet the house on one stock and you don’t over extend yourself and develop debt. Not only does it take the fun out of it but it can be a burden for the rest of your life, so I think getting guidance from people like myself is a benefit.”
Having that expert in your corner can help if something goes wrong or an error occurs and you need help digging into what happened.
“You can’t know everything by yourself,” Dictor says.
Wayne Dictor is the president of Dictor Financial, LLC — located at 2727 N. Atlantic Ave., Unit 900, Daytona Beach 32118. Learn more about his services by contacting him at 407-942-3366 or at Wayne@DictorFinancial.com. (Investment advisory services are offered through Raymond James Financial Services Advisors Inc. Dictor Financial LLC is not a registered broker dealer and is independent of Raymond James Financial Services Member SIPC.)
