complacent. >> for more "options action" check out our website. see you back here next friday at 5:30 now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer, welcome to "mad money." my job is not only to entertain you, but educate you. call me or tweet me @jimcramer. anybody who has a high school diploma has taken chemistry, yes only drink, host of history classes and educate graduate

speaking three languages and have a deep understanding of quantum physics. but you know the one thing they never teach you in high school, let alone touch with a ten foot pole in college, financial literacy. and i'm not talking about economics tote different kind of class. you could be an e con major and learn nothing or retirement readiness let alone thousand invest your money wisely. money, it's just not talked about. it's like the third rail of american education. that's why i'm on a constant mission to teach you about every aspect to manage money both when it comes to reiermt vesting and playing around with your mad money portfolio which is a big part of the reason why i wrote this it. now most of you, event if you don't own individual stocks directly probably have a 401 k plan where you keep the bulk of your retirement funds.

which is why i want to take a moment to talk about retirement. for those of you who have been living in cave the last 20 years, 401 ks plan main way people save for retirement. they're the among the great tax deferred investments. i'm not talking about the republican army here, i mean the individual retirement account. wait, for those of you about to fall asleep, or change the channel because the idea of save for retirement puts zwrou sleep -- you to sleep, hear me out. you need to know this stuff. and i'm going to tell you some things you won't hear from the so-called experts. that the point it's become the conventional wisdom that you have to invest in your 401 k that only an idiot would not contribute to a 401 k plan. a lot of experts tell you to max out if you make enough money. for 2014 the contribution is 17,500. and remember, those

contributions come from your pretax income. however, i am not one of those people who thinks you should max out on your 401k. i am not going to sing the praises of the 401 drs k and tell you it's the key to your salvati salvation. the truth is they can be a real mixed bag. a couple of great features an bad ones too. and the bad features will eat away at your returns year after year. sometimes through fees that are almost totally hidden from you. it is an outrage. so let me lay out the good, the bad, and the yes, the ugly of 401k plans, then i'll tell you whether it makes sense to contribute more money to your own 401k or put the cash somewhere else. first the good. the best thing about a 401k plan, it's a tax deferred. you pay no taxes on what you put and no penny on the profits you make within your 401k which allows your money to compound year after year, decade after

decade until you decide to start to make withdrawals, and that is adverse. regular viewers of the show and readers of my books know that i am a huge believer in the power of compounding. let me give you an example here. suppose you're 30 years old and invest 5,000 a year to your 401 k, remember, no income tax on the contributions. if you choose your investments wisely, you should historically at least, should be able to generate an average return of at least 7%. its been what its been. so over the course of the next 30 years, you'll be contributing $150,000 to your 401 k plan, but because that money is able to compound year after year without any capitol gains taxes, by the time you're 60, that $5,000 per year that you've been investing will be worth over $511,000. let's say it could be worth, but that's what the history table

said. believe me, that number would be lower. perhaps $110,000 lower. that's an advantage. you only ever pay taxes on your money once when you decide to withdraw it. at that point the ordinary income, since you'll likely be retired by then. most of you will pay a lower tax rate than if you've been taxing the money when you first earned it. so that's one major reason to like 401k plans. the second reason, many, but not all, employers will match or partially match your 401k contributions. in other words for every dollar you invest, your employer might throw in 50 cents up to a certain point. that is free money. and you almost never want to walk away from free money. especially when it's also untaxed. but if you don't get free money from your employer for contributing, then i think it's a much less compelling option because as i said before, there are a lot of things about 401k plans that could be really bad. which is why if again you don't get a match from your employer, i believe it's a better idea to save for retirement to an ira.

which has the same tax favor statuses a as 401k, you can only contribute 5500 or 6500 if you're over 50 like me. if you change jobs, you can roll over all the money and do an ira, that's what you should do every time. every time to switch employers or find yourself out of work. got to do this. why do you think an ira is the better option? first of all, 401k plans vary widely from company to company. some give you terrific range of choices and pick vaj stocks. well many more companies give you 401k plans with limited options. sometimes you'll only choose between mutual funds. some of them not being so hot. so for those of you who can't pick your own stocks, my number one rule is before you contribute money to your 401k plan. you have to make sure it gives you the option to put cash into something worth investing it. . you can't pick your own stocks,

then you want a nice low expense index fun that miccics the s&p 500. however, if your 401k doesn't even offer that, then go with a self-directed ira from a full service discount broker so that you have control of your money. one more negative. within a 401 k when you invest, you have to pay that mutual funds fee, but the administrate, the company your employer hires to run the plans will also charge its own fees. meaning that for all the money 401 k's save you in taxes, great deal will be clawed back by the fees. angers me. if you ever looked at your statement and wondered why your holdings aren't increasing. probably the fees. where does this all leave us? where is the bottom line? if the company you work for offers an employer match, then you want to put money into your 401k until that match is maxed out. no reason to pay free money. then after that, put any

additional retirement savings in an ira. if there's no employer match or if there's an employer match but it doesn't give you options that are worth investing in. you would do better to skip the 401k and go straight to an ira. why don't we go to marty in michigan to start the calls, marty. >> hi jim, this is marty from beautiful canton, michigan. inspired by you've, i've been successfully managing by ir argues since 2008. i hope to retire in six years. i want to optimize by portfolio return by investing in individual stocks because i have a limited investment time frame in the market goes both up and down. could you recommend a strategy for my particular circumstances? >> okay. because you have a limited time frame, you have to be careful. that actually makes me to want pull back a little. i would say 50% of your portfolio in stocks that yield with a good balance sheet where we've explored the cash flow and feel good.

4% yield, and the rest we have to wait for a pullback, that's just too dicey. that too short a window. if you had a longer time frame, buy high quality dividend stocks and let it run. let's go to dave in california, dave. >> hey jim from westwood, california, how are you? >> boy do i wish i were there. go to school there too, what's up? >> jim, i have a question about reach. i'm a long-term investor and i'm looking for good yield and thinking about adding to my positions in my reach. but every time they adjust the interest rates, they seem to get crushed or black eye. is the next time going to be different though? things have changed? >> you know it's harder to build in the country now and a lot of companies are really established and they can get credit license and other builders can't, no, it's not going to change, it's going to be like that. that's why i always say to people, please wait for a big break in the real estate investment trust before you just pile in. i think that's the right move for you. this is financial literally mad

money style. here's the information you need for retirement savings in requester employer matches your contributions, max that out. otherwise, stick with an ira and of course stick with cramer, "mad money" will be right back. bulldog: you don't need to camp out

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america into cramererica, you better believe i'd make some serious changes right now. well because this is a show about money, i'm going to stick with the financial elements of the cramer regime because the fact is, it drives me nuts that we don't really teach our young people how to handle their money. would it be so crazy if you had to take a class in personal finance before you could graduate from high school? i think it should be mandatory like the awkward health classes like how to put a metro january -- trojan on the banana? i have no control over the educational shows. i do control what we talk about on this show. can i just take a moment to speak words that we all believe? but very rarely get to say in polite conversation. look, money is important. it's really important. and caring about the state of your finances does not make you some kind of superficial monster. for example, let's say off really lousy credit score and

you want to get married. congratulations. you just inflicted your horrible credit score on your new spouse. now neither you nor your partner will qualify for a loan to buy a car or a house, perhaps even get a darn credit card. these things matter in life. they say money can't buy happiness. i've always found that piece of a cliche conventional wisdom to become dubious at best. as i know firsthand from the time i spent living in my house, i wish i had been an expert to guide me through all of this money stuff way back when when i was unsophisticated. let me answer one of the most important questions, what the heck should young people do with their money? first, foremost, and always, invest it. that's the only way you're going to be able to achieve financial freedom, and by freedom, living a life where you're not again the upon your paycheck. i've always, i'm always thrilled when i see members of the younger demographic who are taking an active hand in

managing their own money. don't have enough money, but there are people who put away a little bit of money, maybe it's movie money, candy money. too many people save and invest too late making their lives more difficult. i know many young people feel like they have all the time in the world, and many more start investing before they're truly ready when there are better things to do with their money. that's why i have three lessons and caveat for all of those who are. recently out of college. why don't we start with the caveat. before you can start investing, pay off your credit card debt. this is something i've mentioned before, but it's true for younger people. particularly those credit card companies since the credit card companies have gotten really aggressive about offering credit to college students. i have five cards when i got out of law school by the way, i had to pay those off immediately. no matter how much money you wrap up in the stock market, if you're kraering a balance on your credit cards and it's going top eat into your returns. and long-term, the interest on the credit cards will probably be greater than the profits you

can make from investing, at least on the percentage basis. so just pay your darn credit card balance in full every month. automate it with your credit card company if you're worried, you'll be attempted not to. now let's get to the these lessons. first, this is really for all young people who've recently graduated and for everyone out there regardless of age and educational level, save money, but i recognize that not everyone has a predisposition to save. we can't all be natural cheapskat cheapskates, i acknowledge that telling you to save over and over again won't do any good. but the stock market is a good way to trick yourself that you might otherwise spend. investing in stocks can be fun. we talk about like that on "mad money," it feels kind of joyless far lot of people, not to mention that the facts of the returns are small that's unfortunately at this stage meaningless, but if you invest your savings in the market, it would be easier to reassist the temp takes to spend your money.

it'll be sitting in stocks that you like. therefore, you'll have to sell the stocks to get your cash back and your natural instinct will not be to do that. that's what i'm trying to accomplish here. not only is this a terrific way to trick yourself into saving, but as the added advantage of being the smartest place to put your money from a financial perspective. right now, traditional savings vehicles like money market funds give you hardly any return at all. it's a ways to keep your savings in them when the cash can make you more money by owning stocks. second lesson for young investors, this is a much more targeted piece of advice. while you're still young, take more risks than say an old foogie like me, in other words, in your 20s you can get away with taking riskier positions. yeah, some say reckless strategies, with the potential upside is huge, but so the potential downside or play with options. generally being more aggressive. why is that? why would i recommend something that sounds reckless? wait a second, it's not because young people are better speck

laters. because when you make money mistake in your 20s, you have your whole rest of your life to fiction it -- fix it. you can afford to buy more high risk stocks and lose money when you're young because you have 40 odd years to earn back the losses. that's when you can take the biggest risk. closer to retiernlt, the more conservative your strategy has to be. more beyond, fewer stocking trading in the single digits, more cash. if you're in your 20s, invest like a young person, not an old person. forget about bonds please, i'm begging you, please. there's absolutely no reason for someone in their 20s to have bond exposure when it could be invested in stocks where it could make you a higher return year after year after year. so young people, i want you you to take this be advice to heart because i suspect that the recent college grads most likely to invest in the stock market are also the ones who are the most responsible, the most prudent about their money. and prudence is great when you're putting together a fwoujt live within your means, or

deciding how much, paycheck to save every month. for young investors, being too prudent is being reckless. 20 somebodies live a little. at least in your stock portfolios. take risks. fefrgt about bonds for the next decades. pay around with names. maybe biotech companies. even if they blow up and all go to zero and i'm sure some will. you have the whole rest of your life to earn that money back. final lesson for young investors, it's never too early to invest. use your 401k if your job has one. put money in a roth ira which is adeal. here's the bottom line, for young people out of college, investing is a great way to trick yourself into saving money you might spend. beyond that, remember when you're young you can afford to take a lot more risks with your portfolio. and it's never too soon to start contributing to your 401k or ira. especially in that ira is a roth. [ male announcer ] don't just visit miami.

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we live in a world where you have more choices about where to invest your money than ever before. a virtual infinity of etfs, but more choice isn't always better. sometimes having more options just makes it impossible to decide which ones are right and which runs are wrong. and you've never had more options when it comes to picking exchange traded funds and mutual funds than you do right now. they are like everywhere. that the point, there are so many different kinds of etfs that it can make your head spin. as a side note, i hate the way many of the sector based etfs, the ones that let you sell and groups the warped the way the

stock market trade. i spent a lot of time talking about in "get rich carefully." you have funds out there, and they can all advertise. the skpaens that run these funds, what do they want? they want your money. and one of the biggest mistakes you can make is to give it too them with a few significant expectations. unfortunately this is one of the most common money mistakes out there. in fact most people equate investing with putting their money in mutual funds. half the households in america have mutual funds. many don't have a choice. a lot of 401k plans don't let use pick individual stocks. they give you a menu to choose from. which is one major reason i think that all else equal an individual retirement can the. why am i rallying against them? simple. if you're investing in mutual funds, you're most likely well to put it delicately, how about

getting hosed. now i don't want to paint with too broad a brush here, there are some worthwhile mutual funds. first, you need to understand the problem with the mutual fund business model. my main beef here is with actively managed mutual funds, mutual funds where there are people deciding which stocks to buy and sell. unlike hedge funds, manages don't get pied for delivering performance. they collect fees from their investors, people like you and the amount of money they make depends entirely on the size of their assets under management, aum. which means the biggest incentive is not to do well, something a good performance can help you with. but bring in more money from you. from more investors. and that's part of the reason why in study after study, year after yeefr, it's shown that the vast majority of mutual funds underperform their benchmarks. in other words, if you invest in an actively managed fun for stocks, then its performance will most likely fall short of

the s&p 500. make matter's worse. even though actively managed funds consistently underperform the market, they have some of the highest fees in the business. so even if your fund does manage to beat its benchmark, the odds are good that any outperformance will be eaten up by big management fees. and you'll end up with an underperforming investment versus being an the saenl 500. of course there is actively managed funds with fabulous managers, i'm going to tell them find them another time. when the mutual fund delivers great results for a so long, they'll stop accepting new investments because at a certain point when the fund gets too big, it's difficult to beat the market. as a general rule, if you're investing in emu chill funds, you don't want to be an in an actively managed one, the fees are too high. it's pretty staggering. you know that i think your best strategy is to manage your own portfolio than individual stocks.

that's what i talk about. that's what cramerica is about. for those who's 401 k won't let you, you want a cheap low cost index fund that mirrors the market as a whole. one that mimics the s&p 500. index funds with the fund, you have a vehicle that will let you participate in the strength of the market without having to spend the time picking individual stocks. this may sound like a really simple solution, but don't overthink it. the whole point is is to to save you from time and effort required to manage your own portfolio stocks. that's why i think it's insane when people own multiple mutual funds, it's very nature, funds should be diversified. there are a lot out there, but there's no ring for home gamers like you to have any exposure to them at all. if you're going to take the time to try to play in sectors, that time would be better buying individual stocks. as for etfs, most are for

trading, not investing. many etfs rebalance ever day and that can take a real tole toll in a long-term performance i like the etf, simple way to play gold. in gold, if you're not a pro and you're not managing a portfolio of individual stocks, then you shouldn't be fooling around with the trading etfs either. bottom line, at the end of the day, the cheap s&p 500 fund is the least bay way to possibly manage your money. better than the vast bulk of funds. it owns everything, the good, bad, and the ugly. and if you have the time, you can beat the performance of an index by picking stocks yourself which is the entire reason i do shh though every night. if you don't have the time though, then don't overthink it. just get a cheap s&p index fund. it's the best way to go. brendan in south carolina, brendan. >> hey jim, how you doing? i'm a big fan. appreciate everything you do.

>> thank you, what's up? >> not much. i'm a young investor, 25, been investing for about a year. >> okay. >> i wanted your recommendation on, you know, the percentage break down of elections between the company's stock, mutual funds, blend investment, and bonds. >> i don't like anybody to have more than 20% of their money into the stock they work at because you're basically doubling down. think of eron, your company is probably not, but you have to protect yourself from the downside. 25, no bonds. simple. no bonds. read my lips. no bonds. michael in new york, michael. >> hello jim, how are you? dpr brooklyn. >> oh man, come over to the place after. we'll knock back a couple. >> i'm going to go, i like mexican food and mexican beer. >> thank you. >> my question is should ipo shares go to large investors before they hit the public market? i've noticed that i've the shares are released, they're up a few dollars, and by the time

they're released to the general public, they're getting the shares at a much higher price. >> well, that is certainly true. michael, it's one of the perks of doing a lot of business. they really can't do much about this. in terms of democracy because in the end, if you do a lot of business pretty much at any company, do you not get a better break? i understand the model, i wish that life were more fair, but a person who does a lot of business with the company does get something in return. in this case, it's good ipos. got money on your mind? too many options throughout to put your money in. i'll tell you understand them. you know i that prefer you do the work and invest smartly in individual stocks, but you must put in the time to do that. if you can't, hey listen, go with the cheap s&p index fund, better than most out there and stay with cramer.

no matter how good you are at picking stocks, if you don't know the rules about what kind accounts to keep your money in or how to manage your personal finances thousand to get the most bang for your buck, then you could be missing out on terrific gains or costing yourself a fortune in all sorts of hidden fees. i admit this stuff isn't as fin as picking stock bs. you know i like to pick stocks. over the course of your lifetime, it could help you build up more wealth. and the simple truth is i don't want you leaving the money on the table because nobody could be bothered to explain the finer points of retirement investing. with that in mind, tell me about whether it makes since to use a

regular 401k or roth, which is a term i'm shoouf you've heard countless times. i know i've talked about the benefits of using an individual retirement account or ira for short. and i don't want to beat a dead horse here. this is a subject after i ton of questions about. should i put my money in a roth account or a regular one? this is what, when you go on twitter, this is what you're going to see. so why don't we start with a roth ira. anyone can contribute as long as they make less than $127,000 a year. aside from the earned income tax credit, the roth ira may be the single greatest thing our government has done for lower income families since the war on poverty, which on best ended with a draw. poverty possibly weighing on points. i've told you about how a regular ira lets you take pretax income, invest it, then you can compound year after year totally

tax-free until you decide to start withdrawing money. but a roth ira works differently. with the roth, you make contributions with after tax income. in other words, like a regular ira putting money into roth won't decrease your tax bill. that's important. people want that tax bill decreased. but on the other hand, once your money's in roth ira, you will never pay taxes on it again. as long as your cash remains in the account, you don't pay capitol gains tax. and when you withdraw it, when which you can do without penalty on 59 1/2. you don't have to pay income tax 30d or 40 years from now. there's one more positive point, after five years, not your gains, and you don't get hit with the 10% penalty which is what happens when you try to withdraw money from a regular ira before you hit that magic age of 59.5. anyway. that's a very, that's very

different from a regular ira where you don't pay any taxes on your contributions now and you get your gains, and your gains don't get taxed within the account. once you withdrawal money, every penny you take out is taxed as ordinary income. which means that when you're trying to decide between rothd ira or 401k. your basically deciding whether it makes more senses to pay income tax now or the roth or wait and pay once you've retired. in other words, you have to figure out whether you'll be in a higher tax bracket after you've retired or a lower one. okay, obviously this is a complicated, if not difficult question to answer, right? really has a lot to do with the specifics of your situation, your career, simply how old you are. let me give you my quick rule of thumb. for anyone whose marginal tax rate is 25% or less, which is most of america, i think you could go with a roth. better to take the hit up front than allow your roth ira to compound tax free.

remember, for those who don't have the diversified portfolio, the smartest thing to do is just park your retirement money in a fund that mirrors the s&p 500. as you get older, add bonds, but really until you retire, stocks should make up the margets of why were investments. i said this before, i'm going to repeat it until you take me off the darn air, it's so contrary to the conventional wisdom. how about a roth ira? then you never pay taxes because it's a 401k plan, it has a higher contribution limit. $17500 per year. and there's one other big difference. unlike a roth ira, roth 401k doesn't have an income cap. no matter how much money you earn, you could take advantage as long as your employer gives you the option. this all depends on the future. i'll admit, if you believe the taxes are headed higher over the course of why r lifetime, then

roth 401 k is definitely the way to go. even if you're making a lot of money in the present. from my money, that is mistaken. for those of you dwroung people who've actually only become politically conscious under the obama administration, it may seem like there's no way to top the tide of higher taxes. history says differently. and i believe we can close the deficit without substantially raising taxes, that's not a political issue, it's just the math of it. at the end of the day, this is both beyond our control and ability to predict. the bottom line, the lower your present income, then the lower your taxes. a roth 401k lets you pay the low rates now and never worry again for your retirement money. unless you make the more likely it is that a roth is for you. and when you're saving for retirement, don't worry about what could go wrong 30 or 40 years in the future. just worry about making the best choices right now. stay with cramer. (horn, ding, ding)

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by their insurance company, you know that's a hassle you don't need. especially these days. plus you'll get recovercare, which helps you pay for everyday needs like house cleaning, lawn care and pet services if you're injured in an accident. so my auto insurance is going to help pay the house cleaning if i'm injured? did you say lawn care? and if i can't walk my dog, they'll help me pay someone to do it for me? call the number on your screen to switch to the aarp auto insurance program from the hartford and be rewarded for your experience behind the wheel. recovercare, auto insurance that helps take care of me. now i've seen it all. you won't drop me, you take care of me as well as my car, and you offer savings to switch. it's unbelievable! if you're 50 or over call now to request your free quote. i'm gonna call. i'm calling. i'm calling. i'm calling. call the hartford at the number on you screen to request your free quote.

we'll even send you this free calculator. call: now. why wait? lately i've brn reading stories about the crushing burden of student loan debt.

right now tens of millions of americans owe more than a trillion dollars in student debt. that is an incredibly high figure. and it's not just that it really stings to graduate from clj and grad school and realize it might take decades to pay back those student loans. in study after study, kids who graduate with no debt end up being more money than their classmates who have outstanding student loans. now i'm a big believer in social mobility which is why i'm teaching you how to use the took market which is the greatest engine of wealth ever created to help you make some serious money. so for any of you who are parents or thinking of becoming parents, let me just tell you right now that there are very few things you can do for your children that are better than paying for as much of their college education as you can afford. we are the college graduates have a much easier time getting jobs, especially in the current environment where unemployment is stubbornly high and we also

know they do make more money. of course, if i were, let's say to make kind of aid mazlo hierarchy, i would say it's more important to save and investment for retirement first, okay. which is why i talked about it earlier in the show. for those of you who are parents. how could your own retirement be more important than making sure your kids have the best possible future? it's just not. simple. believe me. if your retirement, if you reach retirement age and you don't have money to pay for your needs, who do you think is going to support you? it's your kids. you don't want to be a burden on them. so take care of yourself first, address the retirement issue above all. however, after you have saved enough for retirement and given then it's time to think about college. even if your kid's a toddler. gleam in your eye, the best way to save, hands down is through what's known as a 529 plan. now these plans vary state by state. which is a pain in the butt, but the general rules are true all

over the country. there's two kinds of 529 plans. first some let you hedge against tuition inflation by buying tuition credits at today's prices that can be used in the future. that's not what i'm talking about though. i want you in a 529 savings plan. again, these are run by the states, so the rules differ, but generally speaking, doesn't let you manage your portfolio. mix between mutual funds. this is really not my favorite way to do things, i prefer you have control of your assets. 529s have so much going for them that i'm willing to swallow this one. be it in it anyway. when you can choose between funds, go for the low cost fund that mirrors the market, s&p 500 or something like the total market fun that's a total return fund which i like. you'll see that in the 529s, all the stocks traded, but since its weighted by market cap, it's performance will be similar to the s&p which contains the 500,

you know, most of the 500 largest companies. so what are the rules physiotherapy 529? let's say you've just had your first child. congratulations. if you can afford it, you should start a 529 with your kid as the beneficiary. maybe wait a couple days, anyone whose red confessions of a street addict, we talked about it throughout the birthing, not my finest moment. here's thousand works. contributions are not tax deductible, so you're paying for this after tax income, that's not great, but here's the good part. once your money is in the 529 plan, you don't pay taxes on your gains. really, it's a lot like at roth ira except for college rather than retirement. because of federal gift tax, you can only contribute $14,000 a year, 28,000 if you're married and file jointly. still, that's a heck of a lot of money. and by the way, your child grandparents can contribute too. these are cool.

they're in the money of grandparent can also start a 529 with your kid as a beneficiary. for financial aid reasons, it's better to have a parent do. let's say for some reason you or your parents are sitting on a huge sum of money. one of the really great things about a 529 plan is that you can front load five years worth of contributions without incuring can the federal gift tax. as long as you don't write checks to the beneficiary. a sing the parent could invest $75,000 right from the start or if you're married and filing joints, you can contribute $140,000, but the next five years after that, you can't contribute anything without getting hit by the gift tax which is something you don't want. honestly, once you drop that kind of money, you won't need to make too many more contributions, the key here though is that you want to get that money into your kid's account as early as possible. that's because the greatness of the plans is all about the power of compounding. remember, you don't pay taxes within the 529. so if you can somehow con tribe

to contribute $70,000 right off the bat and you invest that money in a low cost index fund, the rule is over time, you'll make 8% per year. i know the stock market is more volatile than that, just as a thought experiment, if stocks generally perform like they have, okay like 70%, all right. you could double your investment in about nine years. so if you start saving right when your kid is born, by the time he or she is 18, the value of the plan will double, and double again, started with $70,000. then after 18 years, borrowing a -- barring a castastrophe. you could have as much as $280,000. that's enough for a fancy expensive private college education and decent chunk of law school too. i knee most people can't front load a 529 like this, especially not with the expenses of raising a child, but it's wort keeping in mind that front loading as much as possible is the best strategy. for grandparents, your 529 plan contributions won't count towards were state tax. last thing about saving for college and grad school.

any money that you don't use, you can transfer to another relative. we're talking about siblings, parents, and first cousins. if you save all the money and your kid decides not to go to college, you can withdraw it. not optimum. here's the bottom line. no, paying for your kid's college education seasonality as important at least financially as providing for yourself for retirement. but if you have children, then after you've made not retirement for the year, putting money in a college savings plan should be the next item in your agenda. it's the best way to protect your kids from the crushing burden of student loan debt. stick with cramer. when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars.

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we have to get to some of the dweets you've been sending me, here we go. @sandy 98015216 asked me, my advisor putting funds saying that protecting me on the downsi downside. look, if you're older and you need the money soon, not that risky. but i think the opportunity cost of being in bonds versus being in stocks should have a higher dividend well it's just a big mistake. i like to be loaded down with bonds, why don't we take a tweet from @mbernasdi. what's your definition of a cheap stock. i like to look at a stock that

has a faster growth rate than the s&p 500. that is my definition of cheap. can i invite you to my wedding? i'm serious, you're the man. i'm 100% serious, no. with stocks at a dividend, should i take the money and reallocate or reinvest that in the same company. always yes, i don't mean to be curt about the wedding, but lie toik mind -- like to spend my time with my family. >> our next tweet is asking where do put cash portion in a portfolio. cash is just a short term instrument. we never get fancy with cash. don't get a longer term cd. tell your bank, listen, keep it in the cash account. you'll be fine. remember, fdic. next, face ceo staff on the show, you can count to be on the

show during good or bad times. get rich carefully, that's what those 21 gun salute ceos are about. there's something i'd like to be there. he asks or she asks the next question. if an alga rhythm, it's powered about 65% of all stocks, yeah, they sure do. let's go to a tweet, chickenhawk, great book, who asked the following, i am reading two of your books right now. they are informative. is there a book discussing bonds? i always tell people to read darst book, morgan stanley comes on friday on cnbc. he's written the best books on bonds. next, question from this person, which book are you reading right now or planning to read? >> i am reading the price of peace, thank you to my daughter

emma for giving me that book to me. it's out on print and i love it. another question who asks the following develope you use any technical indicators to trade, if so, which are the most reliable? yes i do, matt and i, constantly look at charts, i also do off the charts, i am very, very weary of a stock that has a head and shoulders pattern. i like the reverse, and i do always check those out before i would ever pull the trigger. >> our next one is asking i want to invest in big name companies. can the stock be too expensive to be worth buying? sometimes you have to pay up for best of breed. buy half, then threat come down and stick with cramer.

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hope you learned tonight. i like to say this always a bull market somewhere. i'll try to find it just for you i'll try to find it just for you he >> for 15 years on "antiques roadshow," america has brought collectibles experts leigh and leslie keno their treasures. >> andy warhol? this is a classic. >> now these wonder twins are coming to you. >> it's a mission to find things in that home. >> oh, my gosh! these are valuable! >> if you don't know what you've got... >> you know what this is? >> no. >> this is incredible! >> ...the keno brothers will separate the fakes... >> i'm not sure it's real. >> ...from the finds... >> it's a real rembrandt. >> yes! >> ...and change lives... >> $70,000. >> ...one family at a time. >> $119,000! >> yeah, baby! love it! >> and tonight... >> $100,000. >> ...the kenos take on their biggest challenges yet...