This article was updated on January 10, 2018, and originally published October 06, 2014.

Jim Cramer's energy is infectious. He uses every ounce of it to entertain and educate his audience so that they, like him, can make a lot of money. And Jim Cramer knows a thing or two about making money, having amassed a fortune estimated to be worth just over a hundred million dollars. Here's how he did it.

From Harvard to living out of his car

Anyone who has seen Cramer on CNBC's Mad Money knows that he's a smart guy. His head is filled with thousands of stock tickers, as well as enough information on each one to have an opinion on its next move. However, what's truly incredible about Cramer's background is that he has no formal education in investing. He went to Harvard and studied government. He then spent his early working years as a journalist.

Stacks of $100 bills.

Image source: Getty Images.

Like most journalists just starting out, Cramer didn't make a whole lot of money. The meager funds and possessions he did have at the time were stolen from his apartment. He was so broke at one point that he had no other choice but to live out of his car. Seeing that journalism just wasn't going to pay the bills, Cramer went back to school and earned a Juris Doctor degree from Harvard Law School. However, it was during law school that Cramer discovered his passion for the stock market, which is what put him on his pathway to riches.

How Cramer became a stock market genius

Cramer's growing love for stocks led him to devote hours studying them. He was so passionate about the market that he even started leaving stock tips on his answering machine. His tips were so compelling that one guy gave him a half-million dollars to invest. His success with that money eventually landed him a job at Goldman Sachs (NYSE:GS), and after three years at Goldman, Cramer started his own hedge fund.

Cramer spent countless hours researching stocks and became so good at it that it consistently found those that could beat the market. In fact, from 1988 to 2000 he just had one negative year as a stock picker and ended his career with average annual returns of 24% over 14 years. To put those returns into perspective, Cramer was actually a bit better than Warren Buffet at picking stocks: From 1965 to the end of 2012, Buffett's Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) enjoyed a compound annual rate of return of 19.7% and two down years. That being said, Buffett's success was over a longer period of time and turned him into a multibillionaire with a fortune totaling $88.2 billion, whereas Cramer's net worth would be nothing more than a rounding error for Buffett.

Still, Cramer parlayed his hedge fund success into big personal gains. He routinely took home more than $10 million each year in his prime. It has also brought him as much fame as it has fortune. And yet, as rich as Cramer is, he could have had a lot more. 

Did Cramer get out of the game too soon?

Cramer might have been in the right game, and his returns might have been as good as Buffett's, but his net worth suggests he might have left the game too soon. For example, according to Forbes, there are 45 billionaires who made their fortunes by running hedge funds. George Soros had been the richest one at over $25 billion until he gave 80% of his wealth away to charity. 

Even the annual earnings of hedge fund managers make Cramer's look a little light. In 2016, the top 25 highest-earning hedge fund managers and traders pulled in an astounding $11 billion and that was in a year that they produced disappointing returns for investors. The top earner pulled in $1.6 billion while the tenth highest paid hedge fund manager pocketed $410 million. That's nearly four times Cramer's entire estimated net worth!

These days Cramer is actually barred from trading stocks with his personal funds. As part of his agreement with CNBC, he can only own the stocks of TheStreet (NASDAQ:TST), General Electric (NYSE:GE), which used to own CNBC, and Comcast (NASDAQ:CMCSA), which currently owns CNBC. This really hinders Cramer from further boosting his net worth using the stock market, which shows just how serious he is about helping his audience make money instead of further enriching himself.

What we can learn from Cramer

Jim Cramer's story teaches us one important lesson: We don't have to have any formal training to make money in the stock market -- just a passion to learn. While we might never become as rich as Jim Cramer -- or a hedge fund manager -- we can use the stock market as the vehicle to take us to a bright financial future.