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NEW YORK (
) -- "Tonight is all about the big picture," Jim Cramer said on
as he dedicated the entire show to building wealth and learning how to augment your income, not just for a year or two but for the rest of your life.
Cramer said it's fruitless to think you can invest in stocks without a solid foundation for building long-term wealth beforehand. Having a good foundation is essential in a culture that doesn't teach financial literacy, he said.
Before investing in stocks, Cramer said there are three things all investors must do. First, they must pay off all their credit card debt. Even the best of stock market gains will have a hard time competing with the 15%, 20% or 30% you're paying in credit card interest.
Second, Cramer said every investor must have health insurance. Starting in 2014, Obamacare mandates penalties for not having health insurance, so every investor needs to get on board.
Last but not least, Cramer said that every investor must have disability insurance. Without both health and disability insurance, he said, investors can get wiped out in an instant. That's why all three of these items are must-haves before considering investing in the stocks.
Cramer's next step for building long-term wealth is preparing for retirement, preferably if you're in your 20s and have just started working. He said that planning for retirement involves a lot more than just blindly putting a little money away in an Individual Retirement Account or a 401(k) -- it involves having an active hand in both how much you save and where it goes.
That's not to say investors shouldn't invest in an IRA and 401(k), he said. They should, but there's a lot more to it than just having an automatic deduction from your paycheck. Cramer one again preached the values of staying diversified, at least as much as your 401(k) will allow you to be.
Cramer also warned that 401(k) savings should never be concentrated in your employer's stock. As anyone from the dot-com collapse will tell you, investing only in your own company can be deadly. The collapse of
is another perfect example of what can go wrong if you're not paying attention.