If early retirement is something you’re striving for, you’re not alone. A 2024 YouGov survey found that 22% of Gen Zers and 30% of Millennials expect to retire between the ages of 51 and 60. (1) It’s young, especially when you consider that Medicare eligibility typically doesn’t begin until age 65 and the full Social Security retirement age for Gen Zers and millennials is 67.
If your goal is to retire early, you’ll need to save aggressively early in your career and invest your money wisely. Finance personality Jim Cramer has some guidance on this.
He told CNBC (2) that he has a “radical” approach to helping everyday investors grow their portfolios and achieve their financial goals. Here are the three assets Cramer says he must invest in — and what you need to know about them.
Investing in index funds is a strategy recommended by many financial experts.
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 try to replicate the performance of the S&P 500 by matching its holdings and weights.
They differ from actively managed funds in that they do not have professional stock pickers. An active fund will try to outperform the S&P 500 by picking stocks within it. Instead, rather than trying to beat the market, an index fund is happy to capture its returns.
Investing legend Warren Buffett has long recommended that average investors put their long-term savings into index funds. And research supports this theory. Index funds tend to outperform most stock-picking fund managers, especially when lower fees are factored in.
For example, according to S&P Global, over the 15 years ending June 30, 2025, approximately 88% of actively managed large-cap funds underperformed the S&P 500. (3)
While some financial experts may recommend putting all or most of your investment capital into index funds, Cramer says to keep them at about 45% to 50% of your portfolio.
His logic is that a large position in index funds can help anchor and diversify your portfolio. But branching out into other assets could make it possible to outperform the market broadly and enjoy higher returns.
While investing in index funds might bring big returns to your portfolio, it won’t help you beat the broad market. And you may need to do that if you want to retire early.
To that end, Cramer suggests allocating 45% to 50% of your portfolio to five different stocks. Most of those stocks, he said, should offer innovative products or services, sustainable competitive advantages over peers and be able to deliver consistent earnings growth over several decades.
If you’re relatively young, Cramer also suggests that one or two of these stocks should be more speculative. Such stocks offer higher growth potential, but also come with more risk. If they give up, Cramer added, young people at least have plenty of time to make their money back.
Over the years, there have been many individual stocks that have outperformed the stock market. By the end of trading on October 31, the S&P 500 had climbed 95% in five years. Nvidia, on the other hand, is up about 1,291% in value over the same time frame.
This is just an example. The idea is that it’s possible to pick individual stocks that outperform the stock market as a whole.
That said, Cramer’s advice to pick just five stocks to invest in could be very risky. If you put about half of your portfolio in five stocks, each will represent almost 10% of your total assets. This means that if a single stock performs poorly, you could be looking at big losses.
If you plan to invest in individual stocks, you may want to branch out a little more than Cramer suggests. And if you’re only going to stick to five stocks, you might want to make sure they’re not all from the same market segment.
One thing some investors don’t realize is that the S&P 500 is a market-cap-weighted index, meaning that companies with a larger market valuation influence its performance more.
If you then go and invest in one of those larger companies as one of five individual stocks, your retirement savings could depend heavily on the performance of a single company.
Read more: Young millionaires are rethinking stocks in 2026 and banking on these assets — here’s why older Americans should take note
While Cramer’s advice is to put most of your 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 declines. Two of Cramer’s favorites in this category are gold and bitcoin.
In February 2010, the price of gold was $1,112.50 per ounce. Fast forward to early November 2025 and the price had climbed to $4,032.70.
If you look at the price of gold over the last 100 years, you will see that it has risen substantially. Because gold is only available in limited supply, it tends to hold its value, making it a good hedge against not only stock market volatility, but also inflation.
Bitcoin, of course, hasn’t been around as long as gold. It was worth just pennies when it was first launched in 2009. In October 2025, it hit a record high of just over $126,000.
But over 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.
However, limiting it to a small portion of your portfolio can allow you to enjoy some upside without taking on too much risk overall.
Cramer’s approach to building wealth is valid, but also somewhat risky. Its guidance for the individual tranche of shares could create insufficient diversification. And crypto assets in general can be risky, not just because of their relative newness, but also because the crypto market is still very unregulated.
If you’re going to follow Cramer’s guidance, make sure you research your individual stocks carefully and understand the risks of owning an asset like bitcoin.
And if you decide to branch out with gold, make sure you get it from a reputable source and have a way to store it safely. If you don’t like the idea of owning physical gold, you could also consider a gold ETF.
We only rely on verified sources and credible third-party reports. For details, see our ethics and editorial guidelines.
YouGov (1); CNBC (2); S&P Global (3).
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
