Step 5 to investing is choosing your investments. When choosing an investment, you'll want to consider how you expect to make money on it – and how your earnings will be taxed.
Three ways to make money on investments
Some stocks pay dividends, which give investors a share of what the company makes. You get a regular income from these investments. The amount of the dividend depends on how well the company did that year and what type of stock you own.
3. Capital gains
As an investor, if you sell an investment like a stock, bond, mutual fund or ETF, for more than you paid for it, you'll have a capital gain. If you sell it for less than you paid for it, you'll have a capital loss.
Consider taxes before you invest Non-registered investment accounts have no special “tax status” the way registered accounts, such as
RRSPs or TFSAs, do. All investments held in non-registered accounts are subject to tax, but not all investment income is taxed in the same way or at the same rates. Learn more about how taxes affect your investments.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca