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NEW YORK ( TheStreet) -- "Tonight I want to talk about the big picture," Jim Cramer told his Mad Money viewers as he dedicated the show to building wealth, the kind of wealth that can augment your paycheck and bolster your retirement.
Cramer said before you even consider investing in your future, you need to accomplish three very important tasks. First, he said you must pay off all your credit card debt. Even if you're a one-in-a-million investor, it won't matter if your gains are getting wiped out by credit card debt that carries near loan shark caliber interest rates.
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Next, Cramer said you must have health insurance. "Don't be a moron about this stuff," Cramer said, medical emergencies are still the single biggest cause of bankruptcy in America.
Finally, Cramer said everyone must have disability insurance. Without it, he said, you could find your savings wiped out in an instant. You must be able to support yourself in you become injured and unemployed.
Fortunately, having a good job goes a long way to achieving all of these goals, as many employers offer insurance and a paycheck to help get out of debt.
Get Your Hands Dirty
Once you have your bases covered and are debt-free and fully insured, then it's time to start thinking about investing, Cramer continued. But what is investing? Cramer said it's a lot more than just having a percentage of your paycheck dumped into a 401(k) plan that you never look at. Just having an IRA or 401(k) is no longer enough, he said. Investors need to get their hands dirty, get involved and pay attention.
The goal of investing is to use the money you have to make even more money, and that doesn't come from passive investing. Cramer has often said that diversification is the only free lunch, and investors need to remain vigilant to assure their money is never concentrated in any one stock or sector.
One mistake many investors make is investing too much into the company in which they work. Cramer said no one should ever put more than 20% of their savings into a single stock. That was a mistake that many Enron and Eastman Kodak employees made and one you shouldn't repeat. Diversify before anything else.