Jim Cramer says retirement wealth comes down to 3 key assets. Do you own the right ones?

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If you want to retire early, there’s a lot of advice about how to do it, but CNBC’s Jim Cramer says getting out of the rat race ahead of schedule means ditching just one bad investing habit for a couple of good ones.

“Trading is for people who professionally traded like I did,” Cramer said (1). “We don’t want that for you. We want compounding … We don’t want short-term capital gains.”

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The Mad Money host was referring to chasing stocks for turning a quick profit, in this case, specifically Gamestop. He called this kind of investing the equivalent of “musical chairs.” The comparison was apt. As everyone who’s played the party game knows, eventually the music ends, and someone’s left without a seat.

“I like you to get in and stay in,” Cramer added.

Still, investing is a core part of getting ready for retirement — just look at the traditional 60/40 portfolio split between stocks and bonds. As Cramer implied, an early retirement doesn’t mean not investing in the market. It means making sure your money compounds over the long-term. And chasing short-term gains can zero your accounts if you make a bad call.

If early retirement is something you’re striving for, you’re not alone. Gen Z believes the ideal retirement age is 59, while Millennials believe it is 61, according to Manulife John Hancock’s 2025 Financial Resilience and Longevity Study (2).

These aspirations might be too ambitious, given the affordability crisis gripping this generation. TIAA’s 2025 American Retirement Confidence Survey found that two in three Americans believe retiring even between the ages of 65 and 70 is unattainable — with many planning to work until they’re physically unable to do so (3).

If your goal is to retire early, you’ll need to save aggressively early on in your career and invest your money wisely. Cramer has some guidance in that regard.

Here are the three assets he’s backed in the past, plus what you need to know about them.

1. Index funds or ETFs

Investing in index funds is a strategy many financial experts recommend.

“Putting some money in an index fund isn’t bad advice — it’s a good way to play it safe,” Cramer said on an episode of his show (4).

Index funds are passively managed funds that aim to mirror the performance of a specific market benchmark. An S&P 500 index fund, for example, will seek to replicate the S&P 500’s performance by matching its holdings and weightings.

They differ from actively managed funds in that they don’t have professionals hand-picking stocks. An active fund will try to perform better than the S&P 500 by picking a handful of stocks from it. Rather than try to beat the market, an index fund is happy to capture its returns instead. Typically, this makes for a safer investment — especially over 30-years of investing in strong companies with proven track records of turning a profit.

Investing legend Warren Buffett has long recommended that everyday investors put their long-term savings into index funds — claiming it “makes the most sense practically all of the time (5).”

And research supports this theory. Index funds tend to outperform the majority of fund managers tasked with picking stocks, especially when factoring in their lower fees.

For example, according to S&P Global, roughly 79% of actively managed large-cap funds underperformed the S&P 500 index in 2025 (6).

The big trick is to start investing today to take advantage of things like compound interest. Investing just $20 per week adds up — but only if you do it consistently.

Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going

Start saving today with just $20

Take that $20 a week. Over 30 years, that could help you save over $179,000, alone, assuming it compounds at 10% annually (7). That’s a good baseline to start with, and doesn’t account for being able to save more as your salary (hopefully) improves over time.

With this in mind, the easiest way to stay consistent is to invest automatically, without even thinking about it.

Platforms like Acorns make it easier to invest in safer bets like index fund ETFs, and can even help turn your spare change from everyday purchases into an investment opportunity.

How it works is simple: Just link your debit and credit cards, then Acorns will round each purchase you make up to the nearest dollar. If you buy a morning coffee for $3.25, Acorns will round it up to the dollar, transforming it into a 75-cent investment in your future.

Acorns invests your spare change in a diversified portfolio of ETFs managed by experts at leading investment firms such as BlackRock and Vanguard — allowing your cash to work behind the scenes without you having to lift a finger.

With Acorns, you can invest in an S&P 500 ETF with as little as $5 — and, if you sign up today with a recurring investment, Acorns will add a $20 bonus to help you begin your investment journey. This way, you can scale your investment up over time beyond round-ups once you’re comfortable with investing regularly.

2. Individual stocks

While investing in index funds can yield great returns for your portfolio over the long-term, it won’t help you beat the broad market.

And you may need to do that if you want to retire early. Think about it like this: an index fund or ETF gives you a baseline, but investing in individual stocks based on expert advice — again in companies that you like — could take you over the line.

To this end, Cramer suggests allocating 45% to 50% of your portfolio to five different stocks. The bulk of these stocks, he said, should offer innovative products or services, durable competitive advantages over peers and be capable of delivering consistent earnings growth over several decades.

“Most people can’t afford to purely play it safe unless they’re already rich, which is why you have to put the other half of your holdings in a mix of individual stocks that you choose and a non-stock hedge,” Cramer said.

If you’re relatively young, Cramer also suggests that one or two of these stocks should be more speculative. Such stocks offer greater upside potential but also come with more risk. If they go bust, Cramer added, young people at least still have plenty of time left to make their money back.

Throughout the years, there have been many individual stocks that have outperformed the stock market.

Get expert advice

But identifying stocks that can deliver long-term market-beating returns can be challenging on your own. That’s why getting expert opinion can help ensure you’re not betting your hard-earned money on losers.

Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.

In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.

Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

And if you need a service to actually pick up these stocks, you may want to minimize any transaction fees. That’s where a discount broker can make all the difference over 30 years of investing for your retirement.

Platforms like SoFi are designed to make investing simpler and more approachable.

SoFi’s easy-to-use DIY investing platform lets you buy stocks, ETFs and more with no commission fees and no account minimums.

SoFi is designed for both beginners and seasoned investors, with real-time investing news, curated content and the data you need to make smart decisions about the stocks that matter most to you.

Plus, for a limited time, you can get up to $3,000 in stock when you fund a new account.

Over time, this helps make investing a habit and steadily grows your portfolio.

3. Diversified assets

While Cramer’s advice is to put the bulk of investment capital into index funds and individual stocks, he also supports the idea of allocating 5% to 10% of an investment portfolio to what he calls “insurance” assets — investments that can serve as a hedge against stock market downturns. Two of Cramer’s favorites in this category have been gold and bitcoin.

Because gold is only available in a limited supply, it tends to hold its value, making it a good hedge against not just stock market volatility, but inflation.

Bitcoin has a similar scarcity argument, with its supply capped at 21 million coins. But that’s about where the similarities end.

Bitcoin may have gone from being worth mere pennies when it launched in 2009 to more than $126,000 at its October 2025 peak (8), but the ride has been anything but smooth. The cryptocurrency has experienced dramatic swings in both directions, and it comes with risks that traditional safe-haven assets like gold simply don’t.

After a brutal crypto winter, bitcoin was trading around $63,880 as of Aug. 10, down more than 46% from a year earlier (9). And even Cramer has grown more cautious. After IBM Chairman and CEO Arvind Krishna raised concerns that quantum computing could eventually threaten the cryptography underpinning cryptocurrencies, Cramer said he planned to sell his bitcoin (10).

So if the “insurance” part of Cramer’s strategy is what appeals to you, you might want to consider looking beyond crypto.

Gold, on the other hand, has emerged as the dominant safe haven asset. Over the past year, gold skyrocketed in terms of spot price before leveling off and settling at about a 30% year-over-year increase (11).

Hedge your portfolio with gold

Gold has been one of the best-performing assets over the past year, as investors flock toward the safe-haven metal amid growing economic uncertainty.

Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.

With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.

If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.

Is Cramer’s strategy worth pursuing?

Cramer’s approach to building wealth is valid but requires a lot of personal time and effort. His guidance for individual stocks could also create insufficient diversification. And crypto assets in general can be risky, not just because of their relative newness, but because the market is still highly unregulated.

Consult a fiduciary

For those heading into retirement and wondering if they’re in a good spot, it could be a good idea to speak with an advisor. After all, following Cramer’s first piece of advice, to invest steadily over time, is most effective for millennials and Gen Zers.

Getting a second set of eyes on your finances can be valuable at any age. Research from Envestnet found that people who work with a financial advisor see, on average, 3% higher net returns than those who don’t (12).

You can find a vetted FINRA/SEC registered advisor near you for free through Advisor.com.

The platform does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.

Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.

— With files from Maurie Backman

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

CNBC (1), (2), (3); John Hancock (4); TIAA (5); S&P Global (6); Acorns (7); Forbes (8); CoinMarketCap (9); Yahoo Finance (10); APMEX (11); Envestnet (12)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.