Investing 101 for New Canadians: The Basics of Investing (Part 1)

As a newcomer to Canada, building a solid financial foundation is key to achieving your dreams and aspirations.

Investing is a powerful tool that can help you grow your wealth over time.

In this first article of our two-part investing series, we will walk you through the basics of investing, from understanding the many benefits of investing to how investing differs from savings.

1. Understanding Investing

What is Investing?

Investing is about using your savings to earn more over time. You can invest in different investment instruments like stocks, bonds, GICs, or mutual funds, which can help you build wealth and achieve long-term financial goals. Registered plans like the TFSA or RRSP offer tax benefits that might help make your investments grow even faster.

Join us on Thursday November 9 for our live, free, and interactive webinar: Introduction to Money Management as a Newcomer to Canada!

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2. The Benefits of Investing

Investing offers many advantages. Here are a few:

• Keep Pace with Inflation: Investing may keep your money growing to keep up with rising prices over time.

• Build Wealth Faster: Investment products tailored for longer-term goals, such as retirement or education, can lead to higher potential returns, enabling you to achieve your goals.

• A Personalized Approach: Your financial advisor can tailor your investments to match your goals, risk tolerance, and time frame.

• Automatic Contributions: Setting up a regular automatic contribution removes the uncertainty of when to invest. It helps enhance long term growth and reduce your risk over time.

• Harness the Power of Compounding: Reinvesting earnings to generate additional growth over time can significantly boost your investments in the long run. Start investing early to maximize the benefits of compounding.

• Tax Benefits: Special tax treatment in accounts like RRSPs and TFSAs helps grow your investments faster.

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3. What to Consider Before Investing

Before you start investing it’s important to take stock of your financial situation. Here is a handy checklist to follow:

• Budget: Create a budget to know how much you earn and spend. This will help you determine how much money you are left with to invest.

• Set Financial Goals: Assess your goals and the money needed to achieve them, like saving for retirement using the TD Retirement Savings Calculator.

• Create Investment Objectives: Decide if you want growth, income, or security. Your goals will help determine which investments and investment strategy will be best for you.

• Know Your Time Horizon: Consider how long you plan to invest based on your short, medium and long term goals. The investments you choose will need to align with your timeline to allow for market fluctuations.

• Choose a Risk Profile: Determine your ability and comfort to handle investment value changes. Will you be ok if your investments dip low for a time period if they rise higher in the long run? Be sure to select an investment strategy you're comfortable with.

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It’s also a good idea to review these factors as your circumstances change, or at least annually, to ensure you continue to have the investment strategy that works for your circumstances and takes into account the market conditions.

Understanding the basics of investing is the first step towards helping to achieve a prosperous financial future. In Part 2, we will delve deeper into crafting an investment strategy, exploring advanced investment products, and highlighting key principles for successful long-term investing. Stay tuned.

Why Choose TD?

150 years helping Canadians:

TD has a proud history of delivering financial solutions to Canadians for more than 150 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.

With over a thousand branches, a reputation for excellence in financial services, and the ability to also serve you in more than 60 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.

TD offers online support and resources of interest to newcomers on topics such as banking. basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience. TD has thousands of ATMs across Canada to help you take care of your everyday banking quickly and easily.

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Book an appointment to talk with a TD Personal Banking Associate about the TD New to Canada Banking Package. You can book online right away, or visit the TD website to learn more.

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