If you take $1.00 and double it tax-free for 20 days it’s worth $1,048,576 (over a million dollars). Take that that same $1.00, taxed at 30%, it will be worth only about $40,640 — A LOSS of a MILLION DOLLARS!  Why is this so? Because with tax-free compounding, earnings accumulate not only on the principal amount of money but also accumulate on the tax-free earnings as well.  (“Earnings on Earnings“).  Thus compounding combines earning power on principal and earning power on interest. Compounding has been called the ”8th wonder of the world”, a “miracle”. Compounding money at high rates of tax-free return is a definite advantage of real estate, especially with a great tax plan.

The wealthy know that taxes are a primary factor in determining whether you get rich or stay poor.  Let’s say, for example, you’re able to save just $2,000 annually on your tax bill. (With a good tax plan it will be much higher). You invest the $2,000 annually in an IRA which earns a tax-free annual return of 10%.  After 20 years, you’ll have over $114,000!  If you can save $10,000 annually on your tax bill and invest it in a Simple IRA for 20 years, you’ll end up with almost $573,000!

$5,000 in tax savings (which is found money) as a 10% down payment can allow you to buy an additional $50,000 in real estate!  Assuming a 20% yearly return you would earn $10,000 which in 5 years would accumulate to $50,000! Read More→