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, in the 15 years ending June 30, 2025, roughly 88% of actively managed large-cap funds underperformed the S&P 500 index (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: Here’s the average income of Americans by age in 2026. Are you falling behind?

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 allow you to turn your spare change from everyday purchases into an investment opportunity.

How it works is simple: just link your debit or credit cards, and Acorns will automatically round up any purchases made with them to the nearest dollar, then set aside the difference. So, when you buy your morning coffee for $4.25, Acorns bumps it up to $5 and invests the 75-cent difference in a diversified portfolio of ETFs managed by experts at Vanguard, BlackRock or the like. This way, your everyday purchases can start working for you behind the scenes.

Then, once you’re comfortable with your round-ups, you can set up a recurring monthly deposit. That way, you can give your smart portfolio a bit of an extra boost.

The best part? You can get a $20 bonus investment when you sign up with Acorns today with a recurring deposit of just $5.

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.

Use a discount broker

One way to better capitalize on investing in individual stocks is with an online stockbroker. Often, these services offer low or no trading fees, meaning you don’t have to worry about asset under management fees as with an advisor.

One option is SoFi, a DIY investing platform that 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 $1,000 in stock when you fund a new account.

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.

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 are gold and bitcoin.

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

Bitcoin, of course, has not been around as long as gold. However, it too has a limited nature based on the number of available coins, which are restricted by higher and higher computation costs over time. Bitcoin was worth just pennies when it first launched in 2009. In October 2025, it hit a record high of just over $126,000.

Over the past year, gold skyrocketed in terms of spot price before levelling off and settling at a about 40% year-over-year increase (8). Meanwhile, bitcoin is hovering at $77K per coin (9).

Through the years, bitcoin’s value has fluctuated substantially, and not always for the better. Bitcoin is considered a very risky investment for many reasons, including its lack of regulatory protection, questions about its sustainability and extreme price volatility. As such, if bitcoin feels off, it may be time to return to the physical.

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.

A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.

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. Just keep in mind that gold should only be one part of your portfolio — not a one-to-one replacement.

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.

If you’re going to follow Cramer’s guidance, make sure you research individual stocks carefully and understand the risks of owning assets like bitcoin or gold.

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.

But for investors with significant portfolios, like those who might be interested in individual stock picking and broad-based portfolio diversification, financial decisions often become increasingly nuanced.

Managing withdrawals, minimizing tax exposure, and ensuring long-term sustainability often requires greater coordination and strategic planning.

In these cases, working with a financial advisor can help reduce costly mistakes.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

Simply answer a few questions about your savings, retirement timeline and overall investment portfolio.

From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.

You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.

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Article Sources

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

CNBC (1), (2), (3); John Hancock (4); TIAA (5); S&P Global (6); Acorns (7); APMEX (8); Binance (9)

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