1) Using File Manager in your cPanel make a copy of the .bashrc file in your root directory, name it .bashrc.bak.
2) Now edit the .bashrc file and add the following to the end of the file:
export GEM_HOME=$HOME/ruby/gems
export GEM_PATH=$GEM_HOME:/usr/lib/ruby/gems/1.8
export GEM_CACHE=$GEM_HOME/cache
export PATH=$PATH:$HOME/ruby/gems/bin
3) When using a rails application, make sure you add the following to your ./config/environment.rb:
ENV['GEM_PATH'] = '/path/to/your/home/ruby/gems:/usr/lib/ruby/gems/1.8'
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