How to achieve financial independence without being a Scrooge

Do you ever read news stories like Recluse dies and leaves millions to charity? Do you wish you could do the same? Maybe youd prefer to leave a pile of cash to your offspring rather than charities? Theres nothing wrong with that, of course.

Plenty of investing pundits hold up such people as shining examples of financial prudence, and of how to save and invest over a lifetime. But in my view theyre missing the most important part of the word lifetime life.

I dont know about you, but Im not aiming to be the richest one in the cemetery, and Im certainly not living my life like Scrooge, pinching every penny and leadingas cheap and miserable an existence as I can just to accumulate cash.

Balance

No, the key to investing, as with most things, is moderation and balance and you can accumulate a tidy sum and achieve financial independence while still actually spending enough to enjoy life. It all comes down to sensible financial planning.

The best thing you can do is start as early as you can. If youve just finished school, college, university, or whatever and youre starting your first job, youre suddenly going to have some worthwhile amounts of cash coming your way.

Its tempting to just spend it all on enjoying yourself, thinking that you still have most of your life ahead of you and that it will be decades before you need to start worrying about your retirement. But no, that time in your life provides you with the best opportunity you have for achieving longer-term financial comfort.

Invest for the long term

If you put, say, 10%-20% of your salary aside each month (into a stock broker account, and buy shares when youve accumulated enough for a cost-effective purchase), youll never really miss it as its money you never had before. And of course, over the course of your career you should hopefully be able to increase your monthly investment instalments at regular intervals.

But how much will you be able to accumulate? Assuming you manage an average investing return of 6% per year (which is modest you can probably get close to that from dividends alone), and supposing you can put away 500 per month after 41 years youll have a cool million stashed away. If you start work at 21, thats a pretty comfy retirement youll be lined up for aged just 62.

Now, 500 might be too much to manage when you first start working, but you can hopefully work up to it and beyond and a relatively modest 280 per month would still get you a million in 50 years, or more than half a million after 40 years.

Why shares?

Isnt investing in shares a risky business? In the short term, yes it can be but the longer you have, the safer it is.

Barclays, in itsannual equity-gilt study, hasdiscoveredthat shares have been the best performing investment from 1899 to 2016, beatingcash in a savings account in 91% of all rolling 10-year periods.Extended to 18-year periods, shares have won 99% of the time. And over 23-year periods, cash has never beaten shares.

The conclusion is easy withdecades at your disposal, investing in shares is easilyyour best chance of achieving financial independence. But live your life too.