Jim Cramer says Vanguard founder John Bogle, who died Wednesday at 89, championed not one but two ideas that profoundly impacted Wall Street -- the index fund and the idea that fees should be as low as humanly possible.

"It is rare that anyone comes up with something huge that changes a landscape forever. It is almost impossible to find anyone who comes up with two ideas," Cramer said Thursday during a call with members of his Action Alerts PLUS club for investors. "These were revolutionary - and in many ways, out of sync with an industry geared toward excess profitability and aggressive fund-raising."

On the surface, Cramer and Bogle were far apart in investing philosophy. Bogle liked index funds for their low-fee, passive-investing approach. By contrast, Cramer believes average people can beat the market's major indices if they do some homework.

But Cramer, who interviewed the Vanguard chief multiple times over the years, said a strong mutual respect nonetheless developed between him a Bogle, whom he called "one of the great investing minds."

In fact, Cramer said he's long told novice investors that they should put their first $10,000 into Vanguard index funds, then "use your knowledge and some 'mad money' ... to start buying some individual stocks alongside and index fund.

"I believe those with time and inclination and insight can find winners, and I will never relent on that view, because I have seen it all too often with my own eyes," said Cramer, whose former hedge fund earned a 24% compound annual return at a time when the S&P 500 gained just 8% annually.

Cramer said the late Vanguard chief came to the conclusion that Cramer's hedge fund did so by staying small and streamlined and refusing to take on partners. Bogle believed that too many financial firms got in trouble by taking on too much money, which encouraged them to make sloppy bets.

"As long as I kept my assets small and manageable, he said, my hedge fund's out-performance can be explained," Cramer recalled. "He applauded my decision to stay small -- and it worked," Cramer said.

Still, Cramer said he could never quite win Bogle over to believing in active money management.

"He wasn't doctrinaire, although I could never get him to go along with my concept that regular people can and do pick stocks that can beat the market," Cramer said. "He just didn't think it was worth it. That was Jack."

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(By Justin Ho and Scott Van Voorhis.)