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I know millionaires who have never made more than a five-figure income.

You probably do, too.

That’s the funny thing about being good with money. It doesn’t matter what you do for a living. It doesn’t matter how much money you make (although making more helps).

It doesn’t always come down to intelligence, either. I know plenty of dumb people who are great with money. I know certifiable geniuses who always seem to be broke.

Being good with money comes down to five things…

1. Pay Your Bills on Time.

I worked with a guy at Lehman Brothers who had a drawer full of unpaid cable bills. I struggle to see how that happens when you’re making multiple six figures. Seems a bit unmanageable to me.

A life hack I’ve discovered is that when I get a bill, I pay it immediately. I find that if I put it off for even a day, it gets buried in the pile of paper, and then I forget about it.

Some people will tell you to hold off because of the time value of money. That argument doesn’t make any sense when interest rates are super low, as they are now.

Just pay the bill when you get it.

2. Put Something Aside.

In the beginning, I had one motto:

Save until it hurts.

Most people spend and spend and then save what’s left over. Turn it around—save first and then spend what’s left over. You’d be surprised how creative you get about spending if you’ve already moved your savings into a separate account.

This is easy to do with automatic withdrawals.

Most personal finance books recommend saving 5–10% of your income. I think you can be much more ambitious than that.

Twenty percent is the minimum. Thirty percent is a good target. And if you’re only starting to save in your 40s or 50s, you want to save half of your take-home pay.

Just don’t do it at the expense of waiters and waitresses. Nothing is worse than a bad tipper.

3. Maybe Invest It.

I say maybe, because investing isn’t for everyone. A lot of people are better off with cash in a bank account. You can’t lose cash as long as you’re under the FDIC limit.

Most people are bad investors. They take on too much risk, then panic and sell at the wrong time.

As for the people who want to invest and who want to do it well, I point them toward The Awesome Portfolio. If you’re not familiar with it, you can read about it here.

4. Fully Fund Your Retirement Accounts.

This is just common sense. The government is giving you a tax advantage to save and invest. It would be foolish not to take it.

Whether it’s a traditional IRA, Roth IRA, Sep IRA, 401(k), or other retirement account, max it out.

5. Retire Comfortably.

That’s the goal. The bigger question is: What do you want to do when you retire? Sit around and watch cable news and get all paranoid? Chase a white ball around? Travel the world?

I haven’t gotten to Step 5 yet, because I don’t know what I want to do when I retire. A lot of people don’t like to work and are in a big hurry to stop.

I like to work. So far, my retirement plans include buying a condo in Canada and having a private jet to take me back and forth. There is no other way to take all my cats.

People have been saying for years that Social Security won’t be around when I get older. Maybe, maybe not. I expect it will be—it will just be funded through higher taxes or more debt. But it won’t be enough to comfortably live on.

So, Are You Good with Money?

I hope so. Lots of people aren’t. They won’t retire comfortably. They’ll retire—maybe not in poverty, but at some subsistence level that many would consider undignified.

I made it a priority to learn about money when I was 22—and it became a passion. It can’t be a passion for everyone, but everyone should strive to be competent. That should be the goal.

Jared Dillian