Top 10 Things We Learned From Jim Cramer’s New Book “Stay Mad For Life”
We really like Jim Cramer and enjoy watching “Mad Money”. Recently we had the opportunity to read his new book “Stay Mad For Life”. Here are the top 10 things we learned from the book:
1. Put into your 401(k) only what your employer will match because most 401(k) mutual fund options are terrible and too expensive. Invest more as you can into a Roth IRA.
2. Never invest in your employer’s stock in your 401(k). Zip, nada, nothing. If you get laid off and your company is performing terribly, you get hit twice.
3. Never invest in a stable-value fund in your 401(k). It just barely beats a money market fund and has a low return.
4. Never invest in a target date fund in your 401(k). It will be too conservative and way too expensive.
5. Do not invest in all the mutual fund options in your 401(k) and assume you are diversified.
6. Invest your 401(k) in an index fund (S&P 500 Index or Wilshire 5000 Total Market Index). It has low fees and good returns. Most actively managed funds (those that try to beat the market) fail to beat the market 80 to 90 percent of the time.
7. Buy each of your children 1 share of a company’s stock each year on their birthday.
8. Use a Coverdell Education Savings Account or a 529 account to fund your kids college education.
9. Investment breakdown for percentage to be in for stocks and bonds in your retirement portfolio is:
If you are in your:
20’s = 100% stocks
30’s = 10 to 20% bonds and 90 to 80& stocks
40’s = 20 to 30% bonds and 80 to 70% stocks
50’s = 30 to 40% bonds and 70 to 60% stocks
60’s = 40 to 50% bonds and 60 to 50% stocks
Retirement = 60 to 70% bonds and 40 to 30% stocks
10. Cramer’s 5 bull markets for the long term are: Aerospace/Defense, Agriculture, Oil and Oil Service, Minerals and Mining, and Infrastructure.
We highly recommend reading this book, especially for all the valuable information regarding 401(k) plans. If you have the money to spend then by all means go buy yourself a copy. If you are like us and don’t like to spend money, go to your local library and check it out.
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