>> karen >> no, she wouldn't, you can't see it no, karen wouldn't but bk would tell you to by xop. >> tim >> i don't have enough time. >> thanks for watching we'll be 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. welcome to cramerica other people want to make friends. i'm just trying to save you some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. every night i come out here for two reasons. the first is i like the attention. and second and more important reason is i want to help you

build and preserve your wealth we live in a world where it is difficult to become rich if you are not born that way. and i believe the stock market is the best ladder we have simply aren't that many jobs that pay you a salary fat enough to make you rich even if you are a total cheap skate and save every single penny you make that means planning your financial strategy for an entire lifetime if you don't have a high paying job, as long as you can save a chunk of your paycheck, and invest year after year, you can become, if not filthy rich, at least come financially independent. and you will be able to retire easily without the need to rely

on social security that why tonight, i want to help you figure out the best way to manage your money in order to help achieve real financial independence [ house of pleasure >> we feneed to talk about the kin kinds of general investing there is one constant when it comes to managing your finances no matter how old you are. that is the fact that you will never get a better opportunity to make your money work for you than by investing in the stock market even when we are in a bear market, when the actn is treacherous and volatile, it is easy to see the stock market is by far the most effective method

of wealth creation out there it might crash like it does upon occasion but if you take the long view, the very long view, stocks can tend to go higher, and i don't say that as some sort of pollyanna. in the eight hundreds. despite multi -- what you might call well above that mark. that represents a pretty fantastic am of wealth creation. no matter how old you are or wealthy, you are, you should have your money socked away in this, in the stock market. can i give you historical perspective, if you go all the

way back to 1928, before the great stock market crash through the end of 2014, the average s&p including dividends is about -- you can't do it. stocks aren't just the best game in town, they are the only game in town if your goal is to grow your wealth. that 10% average wait a second, you are wrong you're just wrong. forget the fact that it is more than double than you can get i mean, earning next to nothing. let's examine that 10% figure in absolute terms when you are taking a long-term view meaning planning for your entire lifetime, racking up a

10% return starts to seem pretty darn impressive. the market is going to have its up years and down years, but that 10% dividend is holding steady you need to view this number through the lens of what is known as compound interest sometimes i will talk about this as the magic of compounding. think of it like this, if you invest $100 in the s&p 500, and it gains 10% in the first year, you have $110. after another year of 10% gains, you have $121. the gains get larger and larger because each year you are making additional money off the previous year's profits. eventually, you will double your money in roughly seven years for those of you who are really

young, right out of college, seven years seems like an eternity the truth is as you get older, an investment that can consistently take your money up in seven-year's time and doubles it, it becomes incredible. it means you have more time for your money to grow that is why a claimed economists george bernard shaw famously said the youth is wasted on the young. let me do my best to make these numbers sound more impressive. suppose you are 22-years old and you are entering the workforce you have more than 40 years before you are expected to retire let's say you invest $10,000 in an s&p index fund right now.

if the average return of the s&p holds steady, in four decades, your $10,000 investment will turn out to be worth more than $450,000 that's enough to send multiple children through college, grad school, buy a nice house in most parts of the country and that monster multiyear gain, it didn't require any kind of stock picking. it doesn't require you to trade or time the market or even do any sort of research into individual comps which i know is hard for most of you you just need to invest your money in a low cost index fund or etf and then you wait granted you are waiting 40 years, but that seems a lot

more valuable than the initial $10,000 investment that you made when you were young. and had the entire work life ahead of you to make money the regular way. a little money saved and passively invested in the stock market is the easiest way possible when you are young, can turn into a massive fortune when you are old. and all you have to do if you initially save that money is let it sit on the sidelines, ideally in a 401(k) plan or ira. the same logic applies if you are 30, 40, or 50, but you get a lot more bang for your buck. even if you don't have time to do homework, the stock market is the best tool out there for growing your wealth and thanks to the magic of compounding, the earlier in your life you invest

in the stock market, the bigger your capital gains can be. not just capital gains, but also dividends, everything gets reinvested brenton from new mexico. >> caller: big booyah. mutual funds and index funds claim minimizing single stock risk but inherently, though, isn't it fair to say mutual funds and index funds have other risks that you would avoid with a single stock portfolio >> absolutely. and that is why i suggest there is two portfolios. capital preservation and somewhat appreciation fund that you put aside for retirement and that should be in a diversified fund preferred in an index fund

and the rest is mad money. that is why we call the show "mad money." i don't want the bulk of your portfolio in single stocks brian in oklahoma. >> caller: thanks for having me, first time investor. how do you value a company, one company versus another >> we spend a lot of time in "get rich carefully" talking about. what he do is measure the perfect earning stream what matters is if you take a longer term view, you can get a better view. dividends tend to be for preservation and then the capital gains is for the appreciation stream. i want you to have a little bit of both. but you have to be thinking

about what a company can earn in the future this show is about helping you build and preserve your wealth and the stock market is the best toolo do that. a lot of "mad money" ahead the four let word of investing world. what it is and why the conventional wisdom is all wrong. what you absolutely must not be doing in your retirement account. and what you need to do to navigate the bear market stay with cramer >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter have a question? tweet cramer, #madtweets send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc miss something head to madmoney.cnbc.com.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not eat things that mat. morgan stanley

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between. the rules in this game can be totally different depending on what age you are nobody would expect a retiree put all of his or her money in highly risk stocks just because some of this may sound straightforward doesn't necessarily mean it is obvious or standard which is why i am talking the time to go over the important differences depending on where you are in your life cycle. your retirement portfolio which is more conservative, and then your discretionary mad money portfolio. no matter how old you are, retirement objectives must come first. i love to play with the

discretionary mad money side you want to live for a long time and you shouldn't have to work your fingers to the bone and that means planning for retirement from the moment you get your first paycheck. no matter o you are, the first $10,000 you invest in the market should go straight into a low cost index fund or etf that mirrors the s&p 500. index funds are a fabulous way to get exposure in the stock market gains and hey, if you don't have the time or inclination to pick individual stocks then all of it can come from the s&p 500. it is important you get yourself some exposure to the market because no other asset class can

grow remember, anyt less than five stocks in five distinct sectors, you aren't really diversified. once you have maxed out on the benefits of your ira and 401(k) plan if you have one that we talk about your discretionary portfolio. index funds, and then individual stocks now when you are younger, your retirement portfolio and discretionary portfolio, may not look all that different. when you are still in your 20s or even in your 30s, if you invest in something risky, you have a lot otime to get your money back years and years of paychecks

however, if you are approaching retirement and you lose a fortune in the stock market that is a problem you have little time to fix it which brings me to my first rule of generational investing. not only can younger folks take more risks with their money. now you shouldn't go crazy and all of your savings. you should devote some part of your mad money portfolio for betting on these high risk stocks smaller well-known companies this is for the younger cohort the classic development is the development stage bio tech stocks of course by the same token, these smaller biotechs will get

slammed if there is negative news they don't have any kind of dividend protection or even earning protection we are talking about long-term investing. good opportunities that can work regardless whether we are in a bull or bear market. why do i insist that younger investors speculate, take risks that might scare older people? because the gains here can be absolutely stunning. and it will be down right foolish to pass up the opportunities of the winners when you are in your 20s, and 30s, you should invest like a young person taking risks when "mad money" came on the air in 2005, our first ceo interview was with dr. lin slicer.

re-jenneron. the stock taking off like a stratosphere fast forward ten years to 2015, and the stock had traded all the way up to 592. and only the promises of the ceo that things would work out of course it worked out in a major way, but many similar biotechs have done nothing you won't always be able to identify who are the winners in this kind of space but that is

okay as long ayou cast a wide net. nine of them, are going to zero, as long as the tenth one was regenerron, you vowwould have m a monster gain for older investors, speculation is more of a risky game and i only recommend playing it with excess cash thaw can afford to lose remember to speculate while you are young enough to take the hit if something goes wrong. as long as you are discipline and it only makes a strong part of your discretionary portfolio, then it is absolutely worth hunting for the next regenerron without hesitation

next, stocks or bonds? plus the game plan you need to follow when the bear market strikes. many of you will have to take action toermg. ick with cramer.

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its time to address a major issue that i have to admit i don't spend enough time discussing the question of stocks versus bonds. good reason why you don't hear me recommending you invest in bonds very often the fact is ever since the great recession, interest rates have been held down to incredibly low levels and therefore bond yields, have been absolutely paltry both by historical standings and what you can get by general paying stocks even when the stock market has been getting absolutely pounded, bonds haven't represented good values versus equities that is why i have often castigated you about the idea of

prudence can be the best strategy of all. you basically have been ensuring that you are getting a low return on your investment for many years to come if you want to grow your capital and after all, that is what investing is supposed to be about. then like i have said before, stocks are still really the only game in town, even after, so many years there is absolutely a place for bonds in your portfolio, an essential place especially as you get older. even though i believe stocks are the best way to grow your capital. at the end of the day, stock investing and bond investing are about two entirely different things stocks are the tool you use for capital appreciation turn your money into more money. bonds are all about capital

preservation they protect your money and give you a nice and steady small return you invest in stock so you can risk your wealth you have to generateven greater wealth that is what it is you invest in bonds to invest in the part of wealth you can't afford to lose depending on how old you are, there is a huge difference i have explained how people in their 20s and 30s can get away with that attitude, you have the rest of your life to make back any potential losses as you get older you can't afford to lose it. most financial experts will tell you you need to own a lot more bonds earlier in your lifetime than i think is necessary.

you never get rich from owning treasuries our government's longest dated bonds with the highest yields, their lower term don't appreciate much. with that 3.5% yield, as long as you reinvest your coupon payments back in the treasuries, you might double your money in 20 years the average historical return for the s&p 500 is 10% annually which will let you double your money in as little as seven years. if you are under the age of 35 and you own a bunch of bonds, i think you are being way too cautious you know what, i have been around, and that is how i feel even in your 401(k), and ira,

you want to be heavily weighted towards stocks when you are young. allowing your gains to compound tax for year after year. as you get older, owning treasuries, especially retirement fund becomes essential. unlike the stock market, bonds are safe y ideayou do it by putting your cash in a cheap bond fund precisely how much of your retirement portfolio should you keep in bonds. my rule of thumb, i don't think your retirement fund should have any bond exposure whatsoever until you turn 30. it is better in your 30s to kee

10%. once you are in your 40s, i think you can go up to 20% bonds. in your 60s, as you approach retirement age, take it up to 40% to 50% i still think you should keep a substantial chunk of your portfolio in the stock market. you increase your bond exposure to 60% to 70% post retirement. you can't afford to take losses with your investment especially since you are going to need to start spending the money in your retirement accounts. keeping a third of your money.

should always be trying to create more wealth in case you live longer than you expect. in other words, going all in on bonds once you have retired is the bet against your own longevity. who the heck wants to take that kind of bet. as you get older, you should gradual increase your retirement fund bond exposure to the point of 40% to 50% of your money is in u.s. treasury even if you retire, you should keep owning some stocks so some piece of your capital can continue to appreciate over the long-term. best case, you live a very long time and that extra money it comes in handy let's take some questions. how about nasir in pennsylvania. >> caller: booyah. big fan of the show. thank you for taking my calling.

i love your book, "get rich carefully. looking for advice, if i am looking to start a core position, given how important cost basis averaging is. >> this is a great question. a lot of people feel like they want to draw a line in the sand. they want to be in a position we got rid of it. they bought it and put it away taking into account human frailty. if the stock goes higher, what a terrible high quality problem. if it goes lower, you have room to buy i like to buy in stages. i talk about stage buying because i don't want to be overconfident. do it in stages. brian in new york. >> caller: hey, jim, how are you? >> i'm fine. how are you doing? >> caller: i have a 401(k) from a previous employer and i am

trying to decide whether to put it in an annuity managed by a company or in an ira. >> i think you should do it yourself annuities have fees. my experience has been that a lot of annuities have fees that eat things up. i believe in self-directed investing. i do like to take control of my investments and ira let'ses y yd that as you get older, you can add exposure to bonds but young investors, you don't belong in bonds. much more "mad money" ahead. a play book when the bear market takes a bite out of your money and i am answering the questions you have been sending me on

twitter. stay with cramer >> announcer: cramer's exclusive interviews, full episodes, analysis and even your sound boards special access to "mad money" 101. >> the red flag that makes me drop a stock immediately -- >> announcer: everything you need right when you need it. the new madmoney@cnbc.co ♪ a hotel can make or break a trip. and at expedia, we don't think you should be rushed into booking one. that's why we created expedia's add-on advantage. now after booking your flight, you unlock discounts on select hotels right until the day you leave.

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. tonight rather than focusing on the day-to-day stock market, i want to help you take a longer view and plan out how to invest for a lifetime when i say longer, i am talking about taking a 20, 30, 40 or even 50 year view. regular viewers know my mantra it is buy and homework not y and hold you need to keep checking up on

a company. just because you can't pick a few stocks and ignore them for the next few decades, you simply need to boom out a bit and when you start examining stocks over a multi-decade, one thing becomes readily apparent if you know what you are doing, a bear market can simply be a different kind of opportunity. when stocks are getting slammed, getting hit everywhere you look. when when it seems like the losses are endless. you have to recognize you can be getting a terrific opportunity to pick up high quality stocks into the long run. what i am saying is when you are faced with a bear market, when the averages are down more than

10% from their highs and they seem like they could get lower, it makes more sense to start buying most stocks rather than selling them whenever you buyduring a bear market you need to be careful. that means you never buy a position all at once that is pure arrogance and you ask yourself to look like a moron if that stock keeps going lower. buying small chunks incrementally on the way down. in a bear market you use wider scares after you make a purchase, you need to wait for the stock to go down before you buy more over the very long-term, you find you are taking advantage on opportunity most people -- you don't believe me just look at this chart of the s&p 500. look at those hideous declines

during thecial crisis in 2008, 2009 within a couple of years, you would have made a killing. how about that nasty bear of 2011 we snapped back even more rapidly. warren buffett has an incredibly long time. don't get me wrong, if you have a shorter time horizon, if you are a hedge fund manager and you need to be up, you cannot approach a bear market you will lose enough money the vast majority of you are not running hedge funds, you don't need to make money every day or

even every month or year what you need is a long-term strategy that lets you rack in multigains you don't need to be so concerned with short-term performance. this is not to hang on to loser stocks the ugliest most vicious market, they will always create opportunities for smart investors as long as you are patient enough to take advantage of them slowly because if you pounce too quickly, you will buy way too clo he se to the top. you have to be careful what stocks you pick during the bear market you need to do the homework. at least the companies that are doing okay but could do better during a stronger environment.

oil, natural gas, resource, started going down literally in the fall of 2014 you don't want the own the companies that are causing the weakness you want to search for stocks collateral don't hesitate to sell and swap into something that is safer if you want to take advantage of a monster decline, you need to have on the sidelines in order to make yourove. is why i am adamant that you have some cash in your portfolio, and the better the market is doing, the bigger the cash should be doing when things go wrong, you will be able to use the weakness to buthe stocks you like. when you approach the stock market with a long-term time

horizon, you have to remember that big bear markets do turn out to be excellent buying opportunities. buy higher merchandise in small increments on the way down stick with cramer. >> announcer: what is better than "mad money" how about more "mad money. follow "mad money" on facebook, twitter and instagram to go one-on-one with cramer. >> i tell people you have to start with an index fund because i need you to be diversified. >> announcer: get more with guests and go behind the scenes with the most interactive show on television. >> if you can't explain in three bullets why you are buying a certain stock, don't buy

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to investing from a long life general perspective. how to manage your money when you are young, middle age, and even once you retire but there is another aspect that i have to stress here and that is the need to get your kids interested in managing their own money. i say this to parents of children of all ages you can't rely on the public schools or even risky private schools to teach your kids about money. they can do a bang up dog with history, biology, calculus, whatever the typical high school can teach your kids french, spanish, and fancy ones teach you chinese. i get the sense of personal finance is viewed as too simple. your typical high school health

class will help kids put a condom on a banana but no one is going to explain why it is dangerous to maintain a balance on their credit cards. students get bombarded wit credit card offers that can seem irresistible throw in thousands of dollars of credit card debt with student loans, you, the parents bail them out not getting hit up for cash every month when your kids are in their 30s if you want your kids to learn about money, then at this point, you need to do it yourself that means you need to have long boring conversations about the dangerous of high interest rate debt, like the kind anybody can rack up on a credit card

and need to save money in my view, to make this dull personal medicine go down, is with a spoonful of stock sugar, give your children gifts of stock that resonate with young people my classic example is disney give them a couple of shares a year for the holiday starting when they are old enough to appreciate so many blockbuster films, not to mention the terrific theme park business, by the time your kids are teenagers, i think their disney holdings will show a nice gain. having your children actually making money in the stock market themselves and follow it along as much as i like disney, you

don't have to go with mickey mouse. it could be any high company that resonates simply you need to teach them a better way to think about money. rather than viewing cash as something to be spent, you want your children to learn that money is something to be saved and invested to create more money at the earliest possible age. if you don't want to do it for your children, do it for yourself >> announcer: cramer has burned the midnight oil and is ready to find you a raging bull market. powerful executives, scores of tough questions, all week, cramer sits down with some of the market's influential

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together, we're building a better california. okay cramerica, it is time for me to check out the twitter sphere and take a look at some of the tweets you send to @jim cramer

>> for new investor what are pieces of information we should look for stock picking. >> i want you to know the product, what it does and like it the reason why is because a lot of times stocks go down after you buy them if you like the product, you will be more inclined not to panic and get out. i do comparisons, and tell you exactly how to rate a stock. figure out where it should stand versus others and you have got to like the company first or i promise you, in the first big selloff, you will become a seller not a buyer okay the next question is from patrick @patsutera jim, for retirement is it best

to dcost -- here is the way i do it. i try to do it one-twelfth a month if i can if there is a big break in the stock market i accelerate some that i would do later in the year and put it to work in that break. i like to take advantage of the declines and accelerate what i put in and i have done that for years and years and it has worked for me next up is this morning my wife said, what would they do without jim cramer my wife said the same thing. i am a teacher, it is really important for people to know what would you do without yourself this is about empowering you it is not about giving you ideas, it is about how to look at them. a lot of people look at the show who haven't watched it over the

evolution, and i hope that you know that it is the opposite longer term investing is the way to make money, indindex funds an how to do it yourself. next is, jim, would yond sharing your sunday stock. >> it is pushed to me via e-mail hundreds and hundreds of charts. i go over each one, good, bad, question mark, and then story idea for show. i write down each one and where they are and when i am done, i do a long piece for "mad money." i look at which trends i see and for the rest of the week, i send my staff, which stocks i don't understand and why and some

theories about why we should be doing certain pieces and it takes up almost all sunday except for when the eagles are playing. stick with cramer. polk county is one of the counties that you don't think about very much. it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing.

you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable r yourself. when we got the tablets, it changed everything. by giving them that technology and then marrying it with a curriculum that's designed to have technology at the heart of it, we are really changing the way that students learn. and i can't wait for ten years from now when i get to talk to them again and see, like, who they are. ♪

i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money. i'm jim cramer, and i will see you next time!

>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ a stay-at-home mom who began her business in order to support her family. ♪ my name is kiersten and i live in los angeles, california, with my husband and my 12-year-old son and my 8-year-old daughter. i left my job to stay home with my kids, and then my husband lost his job, and so we desperately needed something to help pay the bills.