Every once in a while, Jim Cramer likes to go back to the basics. Do you want to be held hostage by your paycheck for the rest of your life? Didn't think so. That is why Professor Cramer is taking a dive into the first item on his syllabus: saving.
He doesn't consider saving as just a way to make sure you have a comfortable future, but it can be fuel for investments in the stock market. Investments that will free you from the shackles of a paycheck—and could even make you filthy rich.
"My ultimate goal on this show is to teach you how to become better at managing your money—not just investment, but every aspect of your financial life," he said.
The first step? Start by saving 15 percent of your paycheck, or 10 percent if that's what you can afford, he said.
Start by putting half to two-thirds of your savings into a retirement account, such as a 401(k) or individual retirement account (IRA). Those are tax-favored vehicles, and you only pay tax when you withdraw the money at retirement.
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Okay, so you have saved your money like Cramer recommended and you followed his advice to split it between a conservative retirement portfolio and a more aggressive discretionary Mad Money account.
Now what the heck do you do?
Cramer believes that a diversified portfolio of five to 10 individual stocks is the best way to maintain a portfolio.
To start to pick individual stocks, you need to read the company's SEC filings. The most important ones are the annual report, known as the 10-K, and the latest quarterly report, called the 10-Q.
It all comes down to doing your research. Additionally, check out the company's sector and try to figure out of this is a good time in the business cycle to own the stock. Then compare it to the competition.
However to have a meaningful and diversified portfolio, Cramer said that you need to start with $10,000.