Jim Cramer has enjoyed a long, successful career. But it might not have been quite as long or successful he had not embraced this very important idea.
Save. Whatever you can – whenever you can. But always save.
It may sound simple but Cramer thinks too few people really understand the concept.
Quite simply, a good investor always saves – period.
“That’s something my father ingrained in me,” said Cramer. “On the advice of my father I opened an account at Fidelity with the Magellan fund and would contribute a little every week,” said Cramer.
And no matter what twists and turns life presented, Cramer always saved – it was that important.
Sometimes he was able to put away a large chunk of change and other times it was only a few dollars here and there, but nonetheless, Cramer always saved something.
In fact, Cramer realized saving was such an important tenet of success that he continued to save at a time when he could barely afford anything at all.
“That was a terrible six months,” Cramer said.
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The Mad Money host hit rock bottom early in his career – at the time he was working as a journalist and making next to nothing. After a thief broke into his modest California apartment and stole absolutely everything, Cramer had nothing left and nowhere to go.
Cramer was living out of his car.
“I was living hand to mouth, and people would take me in now and then so I could get a shower, change, get a good night’s sleep,” he explained.
At that time in his life, it was a struggle for Cramer just to stay afloat; just to stay healthy. Yet all the while – he continued to put away a little money.
Cramer pared off a small percentage from each paycheck and sent that money to Fidelity for deposit in the Magellan Fund.
At that time in his life Cramer couldn’t afford much – he had to make choices and set priorities. And though he had to go without many things, the virtues of saving money in a mutual fund and by proxy, owning stocks, was one the few things he just refused to forsake.
“I never quit saving,” he said. “How poor was I, yet I still put away money.”
Now Cramer understands that sometimes life is unkind and it’s not always easy to save. But nonetheless, he advocates squirreling a little money away, no matter what.
The takeaway here, he said, is that you must try to save no matter what, through thick and thin. “If I could still save when I was living in my car, sick as a dog you can put away some money, too.”