Dog who sent to wouldbe vurglars with their tail between their legs. We love you, charlie. Thats it for todays crime watch daily. For the latest breaking news, go to our website, imewatchdaily. Com. We will see you tomorrow. Talking to you. And reid alexander. Love him my vision is simple. To make you money. Im here to level the Playing Field for all you investors. I promise to help you find it. Mad money starts now. Welcome to welcome. My job is to educate you and to teach. So welcome. Tweet me at jim cramer. I want to talk to you about the big picture. Ababt Building Wealth in general and not just owning stocks in particular. Stocks are just one part. Absolutely the most important part but still one part of building real wealth. There are some peopop, c cl them the 1 who can make enough money from the ordinary day to day to become the truly rich. For the vast majority of americans, it is n n enough. You need to work with it. If you keep watching, ill tell you how to do that. For the rest of your life. Now usually i come here and tell you what i think of the market. Stocks to invest in. The truth is before you even start investing in stocks, there are a lot of other things you have to do if youou wantt the payoff to actually mean something later on in life. When you most need the money. You may not want to hearr this but i iis fruitless to think you can get rich in stocks without Building Wealth before hand. You can make fortune in the market. If youre hemorrhaging everywhere se, a healthy portfolio wont do much for you. At best it will keep you afloat. If you had planned better, it might haveveet you become wealthy. There are three necessities. Three things you must take care of before you consider owning a stockism asssme you have this taken care of but here on mad money, i feel like im sometimes amiss. Very few high schools or colleges will teach you a thing about managing your finances. You might learn about literature or marxism. That doesnt mean i cant offer this. I know from your emails and of course on jim cramer on twitter, that many of you crave there education. You ask for it every day. Im done ignoring it. What are the three things you must do before you can own stocks . First, youve heard it a million times. It sucks the life out of everything. I need to say it and you needo hear it. You have to, you have to pay off all that Credit Card Debt. I like to be entertaining as possible but i have to nag you. Im not someone who b bieves it should be cut into little pieces. Ive seen it done in hand bags. Credit cards are evil and should be burned in effigy. Youre paying an extraordinarily high debt. Youre paying a loan shark, now, it would make a loan shark blanch. The late great tony sparano would give you better rms. To be fair to the credit card industry, they wont break your ee caps if you cant pay them back. However, they will make you pay penalties and fees. In between college and law 4 school i owed a huge am of money to various creditors. I had very little left to live on. Initially because of some rotten luck and a real bad break. I ended up living in my car. I still managed to put a few bucks a ay into a retirement account. By the way, his first ask, one up on wall street. Remains the text for understanding the markethat has ever been penned. It is on amazon. Once i knew where i was going to live. Even though i was s hock. The Credit Card Company issues found me. And i took a bunch of them down. Pretty much everyone who offered me plastic. I figured could you pay thth minimumu on each one and keep stringing everybody out. The credit issuers never seemed to find. I had four of them going at one time. I had four and i was offered one more. When i offered up the minimum payments and charges, i realized my biggest expinse after my rent. I wanted to default but feared the conseqnces. I ended up restructuring my nonCredit Card Debt with a collection agency. They found me as soon as i skimmed on them. And their easier payingg plan gave me just enough breathing room. I was able to get some nice legal work and worked on the trial. Even though the hourly rate, almost every penny went to the credit card companies. There was nothing left for me. I handed a a drive at goldman saxs. I was able to pay off those bills. In the end i couldnt stomach opening themailil not everybody is as fortunate as i was. I am realistic and know whereof i speak when i say there is no way you can make enough money away from these cardd issuers to let alone pay rental and put a meal on the table. Even with good credit, let alone the credit i had, you can still be paying around 15 annual interest. If your credit is not so hot, you might be talking about 20 or 30 . A darn good year for many hedge funds. If you have a big balance, pretty much all your gains will be sucked down the drain. Nothing you can do about it. So if you go into Credit Card Debt, stocks will be a hobby for you. Stocks cant be the wealth generating machine they should be. All the wealth will be kansas he told out by the amazing wealth destroying powers of the Credit Card Debt. I know i sound like your parents but your parents are right. I said there are three things you need. The second is health insurance. You should nono invest a penny before you have health insurance. You might think the Affordable Care act makes this a nonissue. If you dont have it you pay a fine. The penalties arent big. But they get bigger over time. Even if you that reject obamacare, a a least get some health insurance. All kinls of subsisies to make it more bearabab. Medical emergencies are the single biggest cause of bankruptcy in this country. Ive been theretoo, without insurance. I had no Health Care Plan and had to drive hours to get to a farm workers clinic to see a doctor. I know you dont think it can happen to you. And the younger ones can feel invulnerable but believe me one visit, they can there crush you. Sure you can get Coverage Even if you have a pre existing condition. It is a heck of a lot cheaper to buy insurance before you get sick. And you will need health care at some point. Everybody does. Lastly, you need disability insurance. The rationale is pretty simple. Without these two kinds of insurance you can get wiped out in a second. All the precious gains will be wiped out. You didnt have health or disability insurance. In short pay off your Credit Card Debt, get health and disability insurance. The last two are offered by Many Employers so you have no excuse for not getting them. If you also think you can afford to own stocks. Ese are essential element in your strategy for capital preservation. Remember, we talk about capital appreciation. You grow your investments. We always acknowledge the capital preservation comes first. You need that to protect your money in the present if you want to grow it in the future. Paying off your Credit Card Debt and getting health and disability insurance. Without them investing doesnt make any sense why. Bother . With heavy Credit Card Debt, without health care and disability, building equity can be futile. So start that tomorrow. In connecticut. Hi. H are you . Caller i love your show and i appreciate you takinin time to call me back. I quit my job two years ago. 67 years old now. I have 400,000 in a 401 k ive been t tding myself in small cam. I havent done it recently, thank god. I dont know if i should roll it into an ira . Do you like what you have in your 401 k . We have a selfdirect brokerage. I was in the fidelity alert. You should stick with it. Youre in good shape. Stick with it. I like what youve got. Lets go to mik in new york. Caller hey, mr. Cramer. How are yoyo how are you . Caller im fine. Ive been a retire Police Officer for two years. Ive been in the city Pension Program foror over 20. What is thth difference between a 457 plan and a roth i and what are the benefits of the pros and cons . Ill haveve to ask you to check with your people at your pension plan. It is too important. I am very sorry. You and i dont feel comfortable actually offering advice on that particular situation. Before you can eveve think about investing in stocks, make sure youre building a foundation for long term wealth. Pay off your credit card wealth, get insurance. You know i want you to be diversified. Ill show you how to balance your retirement plan. Shouldou ever tinker with your contribution level . Plus the 401 k isnt the only game in town. Stoenls add an ira to the mix. The leading cough liquid only provides relief for four hours, but did you know theres a product that lasts for twelve hours . Try delsym twelvlvhour cough liquid. Its advanced formula works by immediately releasing powerful medicine that acts fast while its extended release micine lasts for 12 hours. In fact, delsym lasts three times longer than the leading cough liquid. For all day or all night relief, try delsym the 1 doctor recommended 12 hour cough liquid. This has been medifacts for delsym. Americans. We try to live healthy. But many of us dont know there are nutrients that can help support our metabolism. Take new one a day healthy metabolism support multivitamin with chromium to help e carbs from food d bvitamins to helpconvert food to fuel. One a day. Were all familiar with this, axe daily fragrances. But what you wouldnt have seen is this, axe dry spray antiperspirant. Why are you touching your armpit . I was just checking to see if its dry. Dont, thats weird. The first ever dry spray antiperspirant from axe. I take pictures of sunrises, but with my back pain i couldnt sleep and get up in time. Then i found aleve pm. Aleve pm is the only one to combine a safe sleep aid plus the 12 hour pain relieving strength of aleve. Im back. Aleve pm for a better am. Dry spray . Thats fun. Its already dry wait time. This is great. Its very soft. Can i keep it . laughs all the care of dove. Now in a dry antiperspirant spray. Olay regenerist renews from within, plumping surface cells for a dramatic transformation without the need for fillers your concert tee migig show your age. Your skin never will. Olay regenerist. S. Were talking about a subject we dont talk enough about. Long term wealth building. If youre serious about getting rich and staying that way, you must do two things. First, to go amazon and buy the entire jim cramer catalogue. Now that i got that out of the way. The second thing you should do, even if youre in the early 20s and youre only just started working. Youve got to start saving now. I didnt say save for retirement. I said prepare. Youre just stuffing your money in the first nationalbank, stuffing into your mattress, saving in an ira, gre thoug those two may be, they might not be enough to prepare for retirement. Should you take an active hand in setting yourself up for getting youou hanan dirty. Those with a fixed income, you have next to nothing. With that minimum reward, not worth the risk. Thats what im here to do. Young people, dont turn off the tv. If there is anyone who can make this sound interesting, its me. U need to learn hgw to do this sometime. Wouldnt you rather learn for a guy who has b bn around for ages . Even though he sometimes carries ha bags, the sound effects that drive points up. Before i get going, i promise to give you some useful advice that you cant just find on the internet. So many of these have been promoted ad nauseum that i think it is not worth calling it advice. Should you put money into an individual retirement account in ira . Yes, you should. Thats not advice. Thats just a fact. Cut up your credit cards. Dont spend more money than you make. There are people who will still tell you, just that, just those points and assume it is enough to help you get ahead. I say it is not. Basic rereonsibility. Like diet and exercise, please. Im the guy who tells you where to go from there. I didnt make a career after giving people money advice. Ive made a career out of using money to make more money. I came into this business later in life. So what useful advice should i give you beyond handle the using you dont pay money on the taxes. How about some advice you should not do . The conventional advice says to leave on it its own. What should you not do with your contributions . First and foremost, dont use much of your 401 k money to buy stock in the company you work for. Im far from the first person to say this. Company stock is stillhe most popular 401 k stock out there. More people put the retirement dough into the stock of their employer than any other investment. I cannot tell you strongly enough how unwise that is. It you call in. You tell me your top five holdings. You have all five eggs in separate bkets with no companies that are part of the when i tell you this, real money. It is the only free lunch out there. Regular viewers know if you expose too much of your portfolio, you are running an enormous risk. Suppose you h h all your money in text stocks. Lets say the beginning of 2013, a little m me current. Your entire portfolio was in stocks. Beyond yields were sololo investors looking for income had no stocks with notoriously bigger. Then Interest Rates has not to increase. All the high yielding stocks, they finally some some real competition. So you lost a lot of money even though. Were going to get more Interest Rate spikes. Of. Now apply that logic to your 401 k . Do you really want to invest into the same place as your paycycck . Whwh if you worked for enron, or eastman codeack. Or any other company goes under. It is lose lose. Do you think it is conjecture . I used to have aadio showw mom telling me to stop bashing enron. I said they may diversify away from ron. Eaea time i did it i heard about how they got discounts. Such a Great Company was too terrific to sell. The fact is it was down so much they couldnt sell. Then one day. It was gone. Many people have made this argument before and the Company Stock is still the number one investment. Why . Y . Yoyo understand thehe excuses. Im telling you, that excuse doesnt cut it. You have to cut back. Just cut it back tomorrow. Heres the bottom line. Diversification comes before everything else. So ner p more than 1 5 of your retirirent money in the stock of the company you work for. Just like i aise not putting it onore than onethird of the sector. Youre doubling down. Stick with cramer if you want to know about how to manage your retirement money soou cano lasting wealth for you and your family. Theres much more mad money ahead. Americans are living large and that shohod change the way you prepare for retirement. I am on weighing in. I have asthma. One of many pieces in my life. So when my asthma symptoms kept coming back on my longterm control medicine, i talked to my doctor and found a missing piece in my asthma treatment. Oncedaily breo prevents asthma sympms. Breo is for adults with asthma not wewe controlled on a longterm asthma control medicine, like an inhaled corticosteroid. Breo wont replace a rescue inhaler for sudden breathing problems. Breo opens up airways to help improve breathing for a full 24 hours. Brbr contains a type of medicine that increases the risk of death from asthma problems and may increase the risk of hospitalization in children and adolescents. Breo is not for people whose asthma is well controlled on a longttm asthma control medicine, like an inhaled corticosteroid. Once your asthma is well controlled, your doctor will decide if you can stop breo and prescribe a different asthma control medicine, like an inhaled corticosteroid. Do not take breo more than prescribed. See your doctor if your asthma does not improve or gets worse. Ask your doctor if 24hour breo could be a missing piece for you. S s if youre eligible e r i take pictures of sunrises, but with my back pain i couldnt sleep and get up in time. Then i found aleve pm. Aleve pm is the only one to combine e safe sleep aid plus the 12 hour pain relieving strength of aleve. Im back. Aleve pm for a better am. Covergirl is t t easy way to draw attention Perfect Point liner smudge with spongetip to create a smokin kitten eye lash blast mascara adds an instant blast of volume add a pow to your brow wow from e ey, breezy, beautiful everybody in this country wants to get rich quick exempt for s se hippie time thats w wt to live off the grid. But anyone who says you will overnight is doing some keenlds of scam. How about breaking bad . I love how he came on mad money and talked about apples. That darn pure blue meth sold itself. But ancient spoiler alert, that get rich quick scheme ended real bad. The best motor releebl way. Tonight we talkinging about long term wealth building. This is especially critical when your. Poure preparing for vironment. It is possible in n is era of very low Interest Rates, which seem like it could go on for a long teem. Recollection averse, and youre watching your money, this is something you see that poem and reerm. It sounds like youre going to sock the money away. Maybe a long term bond fund. No one want you to do. Thats not how it works. Most people put money away for retirement and feel like they havent take on too much risk. If you have stocks, you believe there is down side, that is not all tha jenl. I call i recklessness. Investing nonee of your 401 k in stocks is far more likely to jeopardize savings in the long run than investing everything in stocks. Why . When youre investing for retirement, you noted to generate. If you are too risk averse, meaning if you load up ononds in your 20s, 30s and 40s, avoiding stocks because of the risk, and i see plenty of 401 k s like this, you will never general rate enough money to retirement comfortably. It is not enough to get a low rerern. The highest rated bonds out there. With that low rate, youre base. Using your moan to make more money. Perhaps a lot more money. Aren always the epitome of risky. The bond prices will fall. Something that will truly be felt by known who putut money in a long term bond official. So many female that will happen. Im not one of them. It means you likely wont generate enough when you want it. And theres a down side risk. They can drop enough to raise two or three years worth of coupon payments. Interest rates skyrocketed in 2013 if you timed it wrong. What else falls under the category . How about one of the most popular vin he isments out there. Stable value funds. Truth is this is a fun that gives you gives you slightly less return. If the return from nothing but bonds is too meetinger to build wealth, then the stable funds are even worse. My goal of the show is to use your money to make even more money and it means you cant be on your auto that i will put money into things leak treasury bonds. Youre saying, this, im not going to use to it generate more wealth. Either you cling to safe and when it is te to retire, or you take some recollections. Being broke is a pretty sure way to be miserable. Im not saying there is no place for bonds. As you get close to. It is an option until much later in life. Pensions were bigger. Life expectancy is shorter and Interest Rates were not being kept down by a fededal reserve that wants to keep the economy moving. Spending even more time for him. And yield thats used to be enlts which yo. Thoseong term bonds might do better in owning the common stocks. If you cant pick yourr own stock, the best wayay to invest is to mimic the s p 500. The kind of stocks that, in any 20year period. As you get older, you can and should take some of that stoik money off the table. Only some. My rule of thumb is that you should keep 10 to 20 of your time in bondnd no reason to turn 30s. Then 40 . From age 60, it may sound like difficult. You should still own some stocks. They can generate more income with not that much risk. I think they should be about a third of your portfoo. But i have to tell you what they say. The c nvention will wisdom was coined a long time ago. Youll need the extra long time from stocks will run out. Nott only stocks is glenls your own long. Ill give you more specific tips to make even more money. Shawn in new york. Caller thanks for taking my call. My uncle got me looked on your show. I love it. My question is about a roth aisha. Recently graduated from. My question is i have the money i want to know how i can inveses more aggressively. Someone is looking at gref growth. In the next t t years you got a shot at making a lot of money. If were in the same conversation, you can pull back. This is your chance to risk that money. You have the rest of your life to make it back. Long time first time. I would like to hear yoyo thought on a buy at home strategy. An annual growth of 10 person to people. I always say how can you have consistent growth if third not consistent. One day it disappeared. Disappeared. These are all Companies Like that. Then they missed, then they missed. Learn to make your money work for you. Ill be giving you moan along the way. More mad money ahead. Just ahead. [cough, cough] mike . Janet . Cough if you can hear me. Dont even think about it. I took mucinex dm for my phlegmy cough. Yeah. But what about mike . He has that dry scratchy thing going on. Guess what . It works on his cough too. Cough guess what . It works on his cough too. What . Stop dont pull me spoiler alert she doesnt make it only mucinex dm relieves bothwet and dry coughs for 12 hours with two medicines in one pill. Start the reli. Ditch the misery. Lets end this. If youre looking to build e foundations of long term prosperity, the first most important step is to set thats why weve been focusing on the 401 k mans or earas. Right now i want to share with you my favorite piece of 401 k advice. This is not some abstract idea. A difference based on how i manage my own 401 k . You know what i am about to tell you is worth hearing. Most people will take advantage of the 401 k plan contributed on a monthly basis. And usually it is automatic. Taken right out of your paycheck. Every month you end up putting in 1 12 of your critical. There are people who will tell you to leave it alale. To just passively invest your money. I am not one of them. Why not . There will be time when the margaret takes hit. A big hit. Why would you contribe everyp month the same amount when the stock market changes . So heres how you can take advantage of aig decline willl when the stock market pullbacks are the reason. Whenever you get a 10 dechina in the s p 500, what should that would you have to double down. That month you put in twice your normal amount. Mean 1 6 over what you man to eninvestigate. If the market stays down, the year might be over. It if you embrace the 1 12. You will make more thanf you contribute every month, month after talking. Im talking about investing it. Or if youre using an actctely managed funds with a manage we are a long record of consistent performance. You probably cant find a mutual fund like that. It is usually best to stick around will this make a huge difference . Maybe. It. St to observe what was happening in the mark and respect. Not taking the closer approach. Pay attention. You can double down and invest twice your normal contribution that month. Take advantage of the cheaper merchandise out there. When you have a long time no different from sale at your local Police Department thats the right way to manage your portfolio portfolio. Karl, dont you have friends coming over . Ah, so . It stinks in here. Youve got to wash this whole room are you kidding . Wash it . Lets wash it with febreze. For all the things you cant wash, use. Febreze fabric refresher whoa hey mrs. Webber inhales hey, it smells nice in here and try pluggable febreze. To continuously eliminate odors for. Pluggable febreze and fabric refresher. [inhale exhale mnemonic]. While were on the subject of long term wealth buding, i need to tell you the b the limits of what somom considerr to be the holy grail of planning. Im the first person to admit that it can be a vital par of setting yourself up for cozy retirement. Os ten today,ly wealthy . Why not . Im not one of those that says you should max out on your contributions. Your 401 k is important but it has its down sides. Plty of thfm. You will hear people say highh matching fees is a problem and theyll eat away. But for my money, the worst thing about most 401 k plans is the lack of control of your money. I believe the best way to invest. You know when it is time to buy more and w wn it is time to sell and when it is time to sell everything. Which is very rare, by the way. Most 401 k plags dont give that you option. You usually get to choose between not more than a couple dozen. Most of what you have to choose from isnt all that grand. I dont know if i would waste my time trying to change that. Thats okay. An aisha doesnt have the high management fees. It the one big difference is that with many 401plans, your moyer will match some of it and you would be a fool tonight take it. Theres usually a cap on how much you can contribute. So contribute as much as you can to get the full match and stop there. Dont put another penny in it. At least not until youve maxed out your 401 k contributions. You want to put the res into an individual retirement account. If you want to know whether to use a regular ira or a roth, may i suggest you pick up stay mad for life. It gives you much more detail. You pay no taxes or fees. Theyre allowed to compound. You start withdrawing the money. At which point you get taxed as regular income. Still a pretty sweet deal. You can only pour 5,500 a year into an ira as of 2015 unless like me youre over 50. In that case you can give 6,500 a year. I say you should max it out after milking your employer drier. If you want to contribute more money, you can put it in your 401 k . Thats only after youve maxed out your ira. 401 k plans have a law that. They are limited. You should get t t full match from your employer. After that, all your Retirement Savings should go into an individual retirement account. If. Just start by contribututg to your ira and keep going until you max it out. Youre over 50. Phil oh no. under his breath hey man hey peter. unenthusiastic oh. Ha ha ha joanne . Is that you . Its me. You dont took a day over 70. Am i right . Jingle jingle. If youre peter pan, you stay young forever. Its what you do. If you want to save fifteen percent or more on car insurance, you switch to geico. You make me feel so young. Its what you do. Y y make me feel so spring has sprung. Dry spray . Thats fun. Its already dry no wait time. This is great. Its very soft. Can i keep it . laughs all the care of dove. Now in a dry antiperspirant spray. Olay regenerist renews from within, plumping s sface cells for a dramatic transformation without the need for fillers with olay, you age less so you can be ageless olay. Ageless. So how ya doing . Enough pressure in here for ya . Ugh. My sinuses are killing me. Yeah. Just wait til we hit ten thousand feet. Im gonna take Mucinex Sinusmax. Too late, were about to take off. These dissolve fast. Theyre new liquid gels. And youre coming with me. Wait, what . you realize i have gold ststus . Do i still get the milil . New Mucinex Sinusmax liquid gels. Dissolves fast to unleash max strength medicine. Start the relief. Ditch the misery. Lets end this. You set rules around the house, right . So set rules for your kids when they go online dont be a cyberbully. No racy selfies. And remember everyone can see everything you post, even grandma. Rules keep kids safe online. They pile up. Weve got to get to work. Your tweets. Youve went sending me tweets. Our first tweet from he asked how do you take advantage of the correlation among, not between, stocks, bonds and money markets to steadilyiyi an ira . This is very easy. It depends on your age. If youre a younger person, i dont want to see any bonds. What are you goingo do . Kounld at 3 . I want to see stocks with dividends. As you get into the middle ages, you can start loading up on bonds. We need to make money witit our money. We cant do it with the bond money. Next, im looking at did i have denied stocks. When is the best time to purchase and what evaluatatn do i review . There is a terrific letter. He worked with me for a decade. He tells you which dividends are safe and which ones arent. Thats what i would recommend. At beacher 5084 asks, at mad money. Pay off car, house ornvest it . Pay off the car. House, let it run. Your mortgage can be very low. You might get a better return from did i have denied stocks and get that mortgage money. Thats a no brainer for me. Lets get to our next tweet. This comes, what percentage should people ve invest . My advice is that you should take a look at your your discretionary money would be, away from eating. Thats the money i want to see put away. Movies. Try it. I did it for two y yrs andnd i cannot believe how much money i was able to save. We have a tweet from at little feet farm. How many stocks is too few to own . We are professionals. We know how to do the analysis. If youre an amateur home gamer, its too hard. Lets go here. Locked student loans. Less than 3 . You arar brilliant. Ats what i want. Take a look. Some of higher yielding utilities are very good. Ththindividual, the iyr. Those are perfect for you. Our next one comes from sean. At mad money, how much is too much . First i know a bench mark of too do not change 26 times a week. Everything you bought is good. Dontake any changes. We only make changes when the circumstances are bad. Not to make changes toake changes. Do you favor any chanss. This is the most important thing. Foinld someone else who has a Financial Adviser and rececmend thats person. Ive discovered that this industry, most people are too small for the big guys. I have been on fights, representing people who have 100,000 and dont get any treatment at all of any sort of personal touch. You have to find someone who in