You can deduct the interest you pay on your mortgage loan. Financial advisers encourage investing in retirement plans, especially those offered by employers. These all grow and compound over the years tax-free. Taxes are due upon withdrawal in your retirement years when your tax bracket is likely to be lower. The interest earned on municipal bonds is totally exempt from federal income taxes, and often state and local taxes as well.
Investors can buy into diversified pools of tax-free municipal bonds through mutual funds.
As always, it's best to consult a professional tax or financial adviser when considering tax-sheltered investments. There are many ways to donate investments to your favorite charities and social change organizations that can provide tax deductions for you and allow you to continue to receive interest and dividends from the principal, or that will reduce the estate tax burden on your heirs. Whatever your situation, you can be a responsible investor and let your values guide your investments.