I invested money even when I was living in my car

Jim Cramer, host of CNBC’s “Mad Money” and Investing Club, thinks people in their twenties have no excuse not to put more money into their investments, even if they think they’re broke.

“They always say ‘I don’t have anything,'” Cramer told CNBC Make It. “I hear that from people in their twenties all the time.”

What they need is “discipline” to stick to an investment plan, says Cramer, not more money. He speaks from experience: For about nine months in his early twenties, Cramer lived out of his car, but still managed to invest $100 a month. Over time, he says, investing made him a millionaire.

At the time, in the late 1970s, Cramer was a journalist in Los Angeles earning very little. Once, while Cramer was out of town on a reporting assignment, a thief broke into his house and stole everything he had. They also emptied his checking account, which contained the money he needed to pay the rent.

He was evicted and ended up living in his Ford Fairmont, spending nights parked at highway rest stops. He carried a gun and a hatchet for protection. For added convenience, he kept a bottle of Jack Daniel’s handy.

Still, he invested some of the money he earned.

“I put $100 into the Fidelity Magellan Fund every month,” says Cramer. “I used to say, ‘Well, you know what? My auto insurance costs that much. My rent costs that much – and I save on rent. “”

Because he started saving early, Cramer was able to take advantage of his investments, which accumulate over time. As his finances became more stable, he increased the dues he paid each month, and by the age of 45 he had about $1.5 million at his disposal. He attributes this success, in part, to starting early and investing consistently each month.

Cramer recommends young people set aside a percentage of what they earn to invest, so they get into the habit of making those contributions. Many financial planners recommend setting aside 10% of your income for the future, but Cramer says you can start small if you need to, like he did with $100 a month.

He says investing in the stock market is a good long-term bet, whether through individual stocks, index funds or mutual funds. “You just have to stay consistent,” says Cramer. “Over time, the stocks have proven to be an incredible asset.”

Keep in mind that most financial advisors advise against investing your retirement savings in individual stocks. This is because investing in a limited number of stocks is riskier than a diversified index or mutual fund that more closely tracks the stock market as a whole.

When people in their 20s complain that they don’t have enough money to invest, Cramer suggests they think of him when he was their age. “I put that money aside,” he says, “and it made me a millionaire.”

To learn more about investing, you can join the CNBC Investing Club with Jim Cramer at a reduced rate.

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