Here's how:
Like many pot-dishes, it's best if made 24 hours before serving so the spices and flavors have time to meld. If I need it for a Saturday evening dinner, I'll make it Friday evening and let it simmer overnight. Then I remove from the heat in the morning and place it in the refrigerator. A couple hours before serving, it's back on the burner at a low heat. By this time, it's considerably thickened. This recipe cannot be made in a few hours, since it has to thicken and that takes time. It's worth the wait, though.

Gatofeo's Chili Colorado
3 pounds beef, cubed into half-thumb sized pieces
2 Tablespoons lard, Crisco or bacon drippings
1 large onion, chopped
3 Garlic cloves
3 Tablespoons ground hot red chili
2 Tablespoons ground mild chili
2 teaspoons salt
1-1/2 Tablespoons ground cumino (cumin)
1 Tablespoon paprika
2 Teaspoons Liquid Smoke, hickory or mesquite
1 cup diced red, yellow or green sweet pepper (optional)

Melt the lard and saute the onions and garlic in it. Mix the meat with the chili, paprika, salt and comino. Add the seasoned meat to the sauteed onion and cook the meat until it is browned. Add the Liquid Smoke to the water, mix well, then pour the smoky water in with the meat mixture. Bring to a boil, then reduce to a simmer. If you wish a slightly hotter chili (this recipe is mild) now's the time to add a little more hot chili powder. But don't overdo it, the heat won't fully come through for a few hours and judging it by taste at this point is not easily done. Stir every half or or so, as it simmers (lid off), to keep it well-mixed.

Recipe notes:
POT NOTES: Use a cast iron Dutch oven if possible. Or any pot with a thick bottom. A pot with a thin bottom will tend to burn everything instead of simmer.
MEAT: I trim every bit of fat and gristle off the meat so there is almost no fat floating on top. If you decide to use hamburger, you'll need to skim off the fat.
CHILI POWDER: Finding anything but the regular chili powder can be difficult in some regions. McCormick, the spice company, makes two excellent chili powders that are usually easily found: McCormick's Chipotle Chili Pepper is plenty hot for this recipe. McCormick's Mexican-Style Chili Powder is good for the milder chili in this recipe.
GREEN OR RED PEPPER: Stir in this cup of diced pepper a half hour before serving. It adds color to the dish, without affecting its flavor. It's optional but a nice touch.

HOW MUCH TO MAKE? I usually make a double batch if there will be more than three of our us eating it. It cooks down quite a bit from what you see in the pot when you first make it, so take that into account.

Serve Gatofeo's Chili Colorado with a green salad, warm tortillas, sour cream, shredded cheese, diced onion, and a pass-around dish of big ol' black olives.
I don't usually make any rice or bean side dish as this chili is quite filling once you start making burritos with it, using the tortillas, sour cream, cheese and onion.
Cold Mexican beer accompanies it well, or you can make a big pitcher of iced tea or mate'. For dessert, I find that Chocolate Mint ice cream goes well. Or you can go all-out and make sopapillas or torrijas.

Enjoy!
Gatofeo