Jim Cramer sees investors in uncharted territory right now. The market has never had interest rates stay low for so long, and it will be a shock once the Fed decides to raise interest rates.

That is why he decided to provide Cramerica with a guide on what to expect once they go up, and how to both survive and thrive.

Why does it cause such turmoil when the Fed raises rates?

Because when the Fed decides to raise rates, it's all about reigning in the economy. Thus, it can be harder to profit from a decline, though not impossible. It just means returning to the principles of how to make money in the long-term, regardless of the Fed.

Looking back to the Great Recession, Cramer saw that Ben Bernanke misread the economy and thought it was stronger than it actually was. This was because he was looking at the housing market, which was way too hot, and raising rates repeatedly to cool off the market even though other parts of the economy were not that strong.

As a result, the Fed raised short-term rates 17 times between 2003 and 2006. By 2007 the Fed turned a blind eye to the impact on the housing market and it became very clear to Wall Street that things had gone wrong.

"It wasn't until oil prices were suddenly cut in half by a glut driven in part by U.S. production that had increased dramatically because of technology, that we got employment and some wage gains that made it so the Fed could declare victory," Cramer said

In Cramer's opinion, those who think that it is bad for the market to go down when job growth is strong do not have a clear understanding on how the Fed works long term. It is good news when more people have jobs, the country is wealthier and the economy is strong.

However not everyone agrees with Cramer, so he decided to review their argument and why he thinks they are wrong. Many think the market has rallied so long because there is easy money floating around because the Fed has propped it up.

The people who think this have four misconceptions, according to Cramer:

First, they think that stocks are up right now because they are just vehicles that are being used for income and thus they will lose this status if rates go up. However, Cramer does not agree with that point of view unless there have been several rate increases already because a stock that yields even 3 percent is still more attractive versus bonds.

The second is the economy will fall apart as soon as rates increase because it is too weak to handle even the slightest move.

The third misconception pertains to the critics who think that any time rates go up, the dollar will get stronger and exporters will be hurt by the translation of the dollar and overseas competition. While both of these issues do have a degree of truth to them, but Cramer warned not to get spooked and sell stocks too early when the Fed tightens because that could damage your portfolio too.

Ultimately rates are so low now that Cramer thinks the country would need to see significant increases in rates before there is a genuine impact to the growth of business.

"I don't think you have to sweat these increases. However, that, again is not enough to assuage those who think the Fed will go on autopilot and raise and raise without being data dependent," Cramer added.

Read More Cramer: Why it doesn't pay to fight the Fed

And while some stocks may be hurt from stronger bond market competition when rates go higher, Cramer warned to not sell all of your stocks.

Why?

Because stocks can still be a fabulous generator of wealth, and while there may be times when it is not great to hold them, there are also times when holding them long-term pays off.

Cramer famously told investors to sell all of their stocks right before the market crashed in the Great Recession. He did this because he perceived systematic risk to the economy and the stock market. It just wasn't worth owning stocks when the fate of the banking system was in question.

"A period where the Fed is raising rates, however, is not one where there is systematic risk," Cramer explained.

Rather, the Fed is merely trying to slow down the economy before inflation damages the purchasing power of the market.

If this were the old days and rates were about to go up, Cramer would recommend investors go for industrial stocks because their earnings will improve as the economy improves. However, that is no longer possible as most big industrial companies have become too dependent on overseas earnings, and a stronger dollar will create challenges as cash floods into the U.S. and away from countries across the ocean.

Cramer also warned that investors need to start to be careful when reaching for trades that have always worked in the past. In addition to skepticism about the industrials, that also means to be careful when buying large tech companies that have exposure in Europe.

Higher rates also mean housing stocks will get hit because mortgage money will cost more. That means homebuilders will have to hope for high employment rates, and that banks will ease terms to lend money.

People also tend to buy gold when interest rates go higher, because it will retain its purchasing power when inflation is higher. Thus, if investors think inflation is imminent, they will all flock to gold.

"There is one issue with gold that you might want to keep in mind. Gold's been in a bear market so long that many of the producers who thought gold would grow to the skies do not have the money to continue to find gold," Cramer added.

With this in mind, Cramer recommended the only exception to this is Randgold, or to buy the gold ETF called GLD, or gold bullion itself. But don't worry—Cramer doesn't see any inflation on the horizon yet, so there is no rush to buy gold.

Read More Cramer: Best stocks to pick when the Fed tightens

Many investors will also want to create short positions against the market. And while Cramer is not allowed to create short positions in his Charitable trust, he did short almost every day when he worked with Karen Cramer at his hedge fund. In fact, Karen Cramer hated long positions and loved the short side.

And Cramerica is just in luck, because Karen Cramer shared her short-selling rules with Cramer. Rules that are timeless and can still be applied today.

Rule number one is called the Business Week cover rule. At the time, this publication often featured companies on the cover, and when it did the stocks jumped. Thus the rule to never short a company that could be on the cover of a big publication was born.

The second rule is to ask yourself, can the company be taken over? If it can, then don't short it. Cramer was burned on this rule three times in his career, and when he looked back he remembered that there were takeover rumors about all of them. He ended up taking a loss on all three companies.

Rule number three is to never short a stock because it seems like it's overvalued. Cramer advised never to try to call an irrational top based on multiples of sales, or earnings. Why? Because there will always be a mutual fund out there that will crush you.

The fourth rule is to never use a common stock to short if puts are available. In the case where Cramer lost money on the three takeover bids, puts would have stopped him from the hideous losses.

"I know you might be itching to short. I am just begging you to realize that there is substantially more downside and you must be much more disciplined if you are going to pull it off right," the "Mad Money" host added.

In that case, it might be a better idea to raise cash and be ready to use it in the next Fed-related downturn.

Read More Cramer's 6 vital rules to short selling