Jim Cramer invested $100 a month in his 20s—even while living in his car: 'I put that money away, and it made me a millionaire'

Jim Cramer, host of CNBC's "Mad Money" and Investing Club, thinks that people in their 20s have no excuse for not putting more money into their investments — even if they think they're broke.

"They always say that 'I have nothing,'" Cramer tells CNBC Make It. "I hear that from people in their 20s all the time."

What they need is the "discipline" to stick with an investment plan, says Cramer, not more money. He speaks from experience: For about nine months in his early 20s, Cramer lived out of his car, yet still managed to invest $100 a month. Over time, he says, investing made him a millionaire.

At the time, in the late 1970s, Cramer was a beat reporter in Los Angeles making very little. Once, while Cramer was out of town on a reporting assignment, a thief broke into his home and stole everything he had. They also cleared out his checking account, which held the money he needed to pay rent.

He was evicted and ended up living in his Ford Fairmont, spending nights parked at highway rest stops. He carried a gun and a hatchet for protection. For comfort, he kept a bottle of Jack Daniel's handy. 

Still, he invested some of the money he earned. 

"I put $100 into the Fidelity Magellan Fund every month," says Cramer. "I used to say, 'Well, you know what? My car insurance costs that much. My rent costs that much — and I'm saving on rent.'"

Because he started saving early, Cramer was able to take advantage of his investments compounding over time. As his finances became more stable, he increased the contributions he made each month, and by the time he was 45, he had around $1.5 million. He attributes that success, in part, to starting early and consistently investing each month.

Cramer recommends young people dedicate a percentage of what they earn to investing, so they get into the habit of making those contributions. Many financial planners recommend aiming to put aside 10% of your earnings for the future, but Cramer says that you can start small if you need to, like he did with $100 per month.

He says investing in the stock market is a good long-term bet, whether that's through individual stocks, index funds or mutual funds. "Just keep it consistent," Cramer says. "Over time, stocks have been proven to be an unbelievable asset."

Keep in mind that most financial advisors advise against putting your retirement savings into individual stocks. That's because investing in a limited number of stocks is riskier than a diverse index or mutual fund that tracks more closely to the stock market as a whole.

When people in their 20s complain about not having enough money to invest, Cramer suggests they think of him when he was their age. "I put that money away," he says, "and it made me a millionaire."

To learn more about investing, you can join the CNBC Investing Club with Jim Cramer at a discounted rate.

Sign up now: Get smarter about your money and career with our weekly newsletter

Don't miss: Credit card annual fee too expensive? Here's how to downgrade it and avoid lowering your credit score