3 types of return
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.
3 ways to make money on investments
Investments like savings accounts, GICs and bonds pay interest. With these types of investments, you know exactly how much money you’re going to earn on your investment.
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
, 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