Jim Cramer Wants Young People To Invest Their First $10,000 Like This

Jim Cramer and Index funds for young people

CNBC ‘Mad Money’ host Jim Cramer has some very simple investing advice for young people who are just starting to save money and invest.

During a recent episode of Farnoosh Torabi’s “So Money” podcast Cramer told young people to Invest your first $10,000 in index funds.

Cramer likes index funds because they are tied to the stock market index, like the S&P 500.

Following the financial crisis of 2008 Cramer decided to start suggesting index funds because of their lower probability of losing all of an investors hard earned cash.

“Now I’ve changed my tune a bit,” he tells Torabi. “I want the first $10,000 in index funds because I feel that the market is so unforgiving, and that if you have two bad stocks out of five, you could get hurt. But once you’ve saved $10,000, then you have some mad money, and then you can be diversified with some stocks.”

Cramer says he like Fidelity Contrafund and Fidelity Magellan, which both have relatively low costs.