Cramer’s 3 top strategies for capital preservation

(The video above was first made available Aug., 23, 2013. Click to go to a searchable transcript of this Mad Money segment)

Want to get rich from the stock market? Jim Cramer says it's not going to happen unless you do these three things first.

"You may not want to hear this, but it is absolutely fruitless to think you can get rich from stocks if you haven't laid down a foundation for building long-term wealth beforehand," said the "Mad Money" host.

That is no matter how fantastic a stock picker you may become, if you're not practicing sound financial discipline elsewhere in your life, the returns from your stocks will go as easily as they came.

"That's why I say there are three absolute necessities, three things that you must have taken care of before you even consider owning stocks," Cramer added.

1. Pay-Off Credit Card Debt

Although paying off credit card debit may sound cliché, Cramer thinks too many individual investors go into the market carrying significant balances on their charge accounts.

"Even if you're a great investor, it won't matter as long as you're burdened by credit card debt. Why? Because you're just not going to be able to generate returns that are consistently high enough to cancel out the sky-high interest rates that most cards carry," Cramer explained.

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In other words, the profits that your stocks may potentially generate will be cancelled out by the payments you make servicing the credit card debt.

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2. Own Health Insurance

"Do not invest a penny in the market before you have health insurance," Cramer said.

That is, without health insurance, an investor is simply too vulnerable to an unexpected catalyst that can wipe out gains; in this case Cramer is talking about disease.

"One serious illness, a couple hospital visits, and you can kiss all the capital you've spent years building in the market goodbye," Cramer said.

And the "Mad Money" host added, if you don't carry health insurance and you're thinking about just taking the penalty under Obamacare, don't do it. He says it makes absolutely no sense from a financial perspective.

"Even if you object to Obamacare politically, it's idiotic to pay a fine and get nothing, rather than pony up and get health insurance.

3. Own Disability Insurance

Like health insurance Cramer says without disability insurance an unexpected turn of events can wipe you out. And if there's anything Cramer doesn't like, it's an unexpected turn of events.

Whether they're in the stock market or in life, Cramer believes a shrewd investor always mitigates risk, and disability insurance is an effective way to do just that.

Call Cramer: 1-800-743-CNBC

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