Viewers of CNBC's stock-trading show "Mad Money" might be surprised to learn that host Jim Cramer doesn't trade individual stocks and keeps half of his portfolio in cash.
His personal investments include:
- 50% in cash
- 40% in U.S. index funds
- 5% in international index funds
- 5% in gold and crypto
Part of the reason is technical: To avoid a conflict of interest at CNBC, Cramer isn't allowed to own individual stocks that could be discussed on his show.
But 50% in cash? He credits that decision to his wife Lisa, who he married in 2015.
"I'm married, and my wife and I sit down and we discuss our finances," Cramer tells CNBC Make It. "And about when I turned 65, she said to me, 'What happens if I outlive you substantially?'
"I said, 'Well, that'd be great.'
"She said, 'But what happens if I own a portfolio of stocks? What happens if the market goes bad after you die? I thought we were partners.'"
"We're partners," Cramer recalls saying. "But I spend [my] time telling people how to handle the market," he said, referring to his long career as a financial professional, author and TV-show host.
"She says, 'I don't care about any of that. We're partners. So, I am making an executive decision: 50% of this is yours, and 50% is mine. And the 50% that I have is going to be cash.'"
When Cramer pointed out how well the market was doing at that time, she said, "You're missing my point. Are we partners? Or are we separate?"
"We're partners," Cramer replied.
"Then our decisions must be 50/50," she said.
Previously, Cramer had been 100% invested, but he agreed to move half of their portfolio to cash.
"I did it," Cramer says. "And the market went up.
"But she just said, 'Great. Your half went up. But I can sleep at night, and I couldn't before.'"
Cramer still laments the lost earnings potential of keeping that money on the sidelines, but he says there are "bigger things in life than money" and he's "happily married."
And "happiness is pretty good to have."
To learn more about investing, you can join the CNBC Investing Club with Jim Cramer at a discounted rate.