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But if I am going to help you try to be the best investor that you can possibly be… I know that I need your attention… that is why I come out here every day with the Bozo the Clown/Soupy Sales routine… that so many people try to write off… the fact is, I am really trying to make maybe the most boring subject on earth interesting… and that is just what every good teacher did for me… so right now I want to talk about retirement. I want to talk about dodging taxes… because that is what 401K plans and IRA’s are… the stables of retirement investing and dodging taxes… you don’t pay money on the money that goes in… you don’t pay taxes on dividends and capital gains as long as you keep them in the 401K or the IRA… you could put off paying taxes on all of your gains for 30 years or more… imagine letting that compound… until you finally decide to withdraw your money… and then it is all just taxed as ordinary income… once… 30 years of untaxed gains… if that is not mad money, nothing is.

But I am not here to talk to you about this the ins and outs of retirement plans, we have been over those before… you probably already know the details… no, I want to tell you about your 401K, IRA secret weapon… the kind of stock that will let you rack up so much tax free money in your retirement account… that you will be putting my picture up on the wall and kissing it every night… something that I already do for about 45 minutes before I go to bed… I know that I have got the Republicans in the audience happy… but even the Democrats who support taxes in principle, don’t like paying them… what is my secret weapon.

You know that with most stocks that pay dividends you only pay a 15% tax on that dividend income… oh by the way, along with my old partner Larry Kudlow, I take personal credit for the dividend tax cut… as we pushed, and pushed and pushed for it… every night back in the old Kudlow and Cramer days… so the next time that you want to blame someone for rising income in equity… don’t blame the government… blame Jim Cramer… I already get so much flack for everything else, I mean what is the point… alright, that is the story of regular dividends.

But there are some stocks, usually stocks with incredibly high and save dividend yields, where you have to treat dividend income like any other kind of income… meaning that the Fed’s can take up to a 35% cut, or more… what are these stocks… they are REIT’s… Real Estate Investment Trusts… and they are royalty trusts, often known as energy trusts… these are companies that don’t pay any corporate taxes so long as they give at least 90% of their income back to you, the shareholder, usually in the form of big fat dividends… the yields on these stocks can be enormous… for energy trusts, which range from companies that own producing oil and gas fields… Permian Basin… Purdue Bay, there are a couple of examples… the companies that operate oil pipelines… they don’t produce anything, just ship the stuff to you… that is Kinder Morgan Energy Partners… sometimes these can yield us 10% to 15%… gigantuan yields that aren’t taxed as dividends.

When it comes to royalty trusts, you should talk to a tax professional… because paying the taxes on your dividends can get very complicated… a lot of paperwork… but you know that it is worth it to do the paperwork… some percentage won’t be taxed because of depreciation… some could be taxed deferred… cause it is treated as return on investment… but the part that you have to pay taxes on will be taxed as ordinary income… so unless you are in the 15% or below tax bracket, you will benefit from putting these royalty trusts in an IRA… oh by the way, no Canadian energy trusts, you have to pay a special tax… and right now we are not talking about, we are talking evading taxes… avoiding taxes… let’s say reducing taxes… that sound nice and legitimate doesn’t it.

Now, when it comes to Real Estate Investment Trusts, you have to be careful too… make sure that you are not buying one with too much debt… otherwise you could be putting a ticking time bomb in your retirement portfolio… REIT’s don’t usually don’t have such high yields… but they still have terrific dividends that are taxed as income, rather than at that 15% dividend tax rate… that is where your 401K and your IRA come in again… you buy these stocks for either kind of retirement account… you won’t pay any kind of tax on these sweet huge dividends… none… not the regular taxes that you would pay if you bought these stocks for non-retirement accounts… not the 15% tax on normal dividends… not taxes period… not until you pull your money out after you retire… every year you will take in these big yields… and then you can reinvest the yields so that they will compound… and over time you are looking at huge tax free gains.

A royalty trust that constantly yields 12%, will probably out perform the S&P over a 10 or 20 year period… and we are not even considering the possibility that the stock goes up too… one more thing about REIT’s, the second part of your 401K, IRA secret weapon… don’t fall under the trap of thinking that these are just real estate stocks… you got medical REIT’s, stocks that own the land under hospitals or research facilities… you have got timber REIT’s, which own timber lands… and I am not talking about the boots here… these are all kinds, they are all kinds of companies, and all with high yields… and not all pure plays on real estate… the one constant is that their dividends are taxed as dividend income.

Which is why the bottom line is that....