When you become a millionaire, nothing really changes. One day you are not a millionaire and the next day you are. But you are still you. Your life is the same, with the same worries and concerns.

The reality is that money doesn’t solve your problems. As I’ve said before, lack of money is not the cause of your stress. And that is what The Jared Dillian Letter is about: Stress. Or more specifically, how to eliminate it.

I’ve noticed that people say they want to reduce their stress. And yet, their trading habits do the exact opposite. When I see inexperienced investors bragging about trading GameStop (GME) or AMC Entertainment Holdings (AMC), it just makes me cringe. That is not going to reduce your stress.

Today, I am going to share my plan for living a stress-free financial life. I hate the easy step thing, but here it is…

Step #1—Minimize the use of debt. Debt is the #1 source of financial stress. You’re constantly worrying about making the monthly payments. Credit card payments. Student loan payments. Payments on your new Sub-Zero refrigerator. What happens if you lose your job? The merry-go-round stops.

Plus, you are wasting a lot of money on interest. I’ve estimated that the average person spends 20% of their income on interest. You don’t get anything useful for that money. You are just contributing to bank profits.

Imagine if you never spent any money on interest. It’s more money to spend on other things, or more money to save. Anything is better than giving it to the bank.

Step #2—Live within your means. I am not against spending money. And I am definitely not a tiny-house-loving minimalist. I spend money on plenty of things (big house included), but I have always lived well below my means.

If you cannot afford the lifestyle you want, there is a solution: Make more money.

Step #3—Get the big things right. That means the house, the car, and the student loans.

If you buy a house you can’t afford, your mortgage payment will crowd out your ability to save. If you buy a new $60,000 car on credit, instead of the $15,000 clunker you could have paid cash for, you are wasting money on interest. (See Step #1.) And if you take out $200,000 in student loans… well, you’re hosed.

When you get this stuff right, you don’t need to worry about a million little things like buying cheaper toilet paper or cutting back on lattes.

#4—Invest early and often. Everyone should save at least 20% of their take-home pay. Set up automatic withdrawals from your bank account and just do it. If you wait until you’re 45 years old, you’re going to have to save 50% of your income. And that isn’t very much fun.

Keep in mind, where you invest your savings is less important than the fact that you’re doing it. Dropping 20% of your take-home pay in an ordinary savings account at the bank is infinitely better than saving nothing at all. But for the best results…

#5—Get your asset allocations right. Investing 100% of your portfolio in stocks is not a good asset allocation. Investing 80% of it in stocks is not good, either.

The optimal asset allocation for your core portfolio is: 20% stocks, 20% bonds, 20% cash, 20% gold, and 20% real estate. That is what we have in The Awesome Portfolio. Because over time, that is the asset allocation that delivers the best risk-adjusted returns.

Following The Awesome Portfolio allocations means the market won’t give you a heart attack every three years. So, you will stay invested, and your money will keep compounding.

And yes, you really do need that 20% in cash. Cash is the option to buy something cheaper in the future!

#6—Retire as late as you possibly can. Retiring early can destroy your finances and make you miserable. The people who start drawing Social Security at age 62 only get teeny tiny payments. Then they end up living to 92—and they can’t afford to do anything except watch reruns of “The Price Is Right.”

You can work until age 70. And if you take care of yourself, you can keep working beyond age 70.

#7—Relax. Chill out. Don’t freak out and stick to the plan. This stuff doesn’t have to be hard. Do these seven things, and you are going to be fine.

Jared Dillian