You make More money by saving on taxes than you make by making More
money!
A $5,000,000 investment earning a return
of 10% generates a taxable profit of $500,000. A 20% capital gains tax rate (goes in effect January 1, 2013) results in $100,000
of federal income tax. You have a choice of whether you want to pay it or shelter it.
Saving that tax and
reinvesting it for 10 years results in an additional gain to you and your family of $2,012,491 and half of that amount if
you only receive 5%.
Remember, using the highest tax bracket, you had to make $1.50 to invest a $1.00 after taxes.