Investing in Canada as a newcomer: A guide to building wealth

A TFSA is a versatile account that allows you to grow your investments tax-free. It’s a great choice for those looking to save for both short- and long-term goals. You can invest in a variety of products, from mutual funds to stocks, with no tax on earnings or withdrawals. This flexibility makes it an excellent starting point for newcomers who want to see their money grow without immediate tax implications. CIBC offers a TFSA. It allows you to invest in mutual funds, stocks, bonds and GICs, helping you build wealth while avoiding taxes on any gains.

An RRSP is specifically designed to help you save for retirement. Contributions are tax-deductible, which can reduce your taxable income and help you save more efficiently. While the funds grow tax-free within the account, you’ll be taxed on withdrawals when you access the money in retirement. This is especially beneficial if you expect to be in a lower tax bracket when you retire. If you’re thinking long-term, consider this option and check out CIBC’s RRSP options.

If you've maxed out your TFSA and RRSP, non-registered investment accounts offer additional flexibility. While income from investments in these accounts is taxable, they have no contribution limits, allowing for greater potential growth. They’re a solid option for investors who have more complex financial goals and want to diversify their portfolios.

Diversification is key to managing risk in any portfolio. In Canada, you can invest in a mix of equities, bonds and other financial instruments to spread risk. Consider a balance of Canadian and global assets to hedge against market volatility. Familiarize yourself with the various asset classes to build a resilient investment strategy.

Real estate is another viable option to consider, especially if you're looking for more tangible assets. Whether you’re investing in a home to live in or a rental property for income, it’s important to understand the Canadian housing market. Be sure to factor in costs such as property taxes and maintenance when budgeting for real estate investments.

Investing can seem overwhelming at first, especially in a new country. It’s always a good idea to seek professional guidance to tailor an investment plan that meets your individual needs. CIBC advisors are available Opens a new window.. An advisor can help you navigate investment options like TFSAs and RRSPs, and offer advice on building a diversified portfolio.