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Personal finance: Jim Cramer’s mutual fund picks

Jim Cramer’s book, Real Money, has had the opposite effect that he probably intended: it convinced me that I shouldn’t buy individual stocks — or at least, they shouldn’t make up the bulk of my investments. (He recommends devoting 20% of your investments to high-risk, discretionary stocks while you’re young. That still sounds good.)

That makes most of the book’s other lessons pretty useless to me now, other than preventing me from losing a bunch of money in the long run. But there was one other great part, with only one page devoted to it (page 200), that’s worth the price of the book for me: the list of recommended mutual funds for people who don’t want to buy individual stocks.

There’s so little guidance out there on this topic for newbies (like me and probably you) that I’d love to share this information here. Here are his recommendations:

HIGH RISK:

MEDIUM RISK:

LOW RISK:

ALSO RECOMMENDED:

In case you didn’t know: (I didn’t)

If you already have an investment account with someone else (Vanguard, E*TRADE, etc.), you can probably still buy these funds without starting a new account at their respective banks. Search for their ticker symbols from your investment account to find out.

Sidenote:

There’s a huge lack of good, practical, useful financial advice for regular people. Maybe it’s because money discussion is taboo. I don’t care — we’d have many fewer problems with personal finance in our society if people were better educated about it.

I’ve personally lost thousands of dollars from being uneducated (or under-educated) about finance, from both direct losses and missed opportunities. I’m lucky that I’m finally learning about this as a debt-free 25-year-old.

Hopefully we can have a more open discourse about personal finance in our culture. It’s too painful to see 50-year-olds without retirement funds because nobody ever told them they needed one, or 20-year-olds with credit-card debt because they bought frivolous things and didn’t consider the math.

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