During financial literacy month this April we’ve discussed the process toward financial independence that we employ in my practice at Oak Partners.

First, we discussed working to set aside an emergency fund, then continuing to save an amount comprising about six months of household expenses. After these two steps, last week we discussed paying down household debt and changing behavior to stay out of debt in the future.

Finally, with our cash reserves in place and our debt under control, we can begin to invest for longer term goals such as a college education or retirement. If you’ll recall, I feel it's important to proceed through this process in a step by step manor, the only exception being taking advantage of an employer match to contribute to a retirement plan.

Now that we are ready to begin investing, the question becomes how. Well, all things being equal in life, I usually favor the simple or straightforward solution. For most Americans this more simple solution is going to involve utilizing an employer sponsored retirement plan such as a 401(k) or 403(b). Through payroll deduction, these plans enable participants to make frequent, small investments into a select number of investment options.

If the plan sponsor, i.e. the employer, is being mindful of its obligations with the retirement plan, the investment options in the plan should be monitored for performance and cost effectiveness, and there are likely to be fund options offering immediate diversification based on a targeted risk level or estimated retirement age.

When a household is ready to begin investing for the longer term, I think it’s productive to sit down with a financial adviser, or develop a plan using online tools, to determine the amount of money that should be invested each month to meet goals based on reasonable assumptions.

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All to often I find investors underfunding a retirement by simply doing enough to get the employer match, or sometimes even maxing out an employer plan arbitrarily, essentially overfunding retirement at the expense of investing for intermediate goals. It's better to have a savings and investment plan that can be consistently monitored to make sure it stays on track.

When we get into the realm of investing for the long term, we also begin to experience financial market-based risk. The prevailing wisdom is younger investors with longer time horizons can be more aggressive with market risk as they are theoretically able to endure market cycles with more patience.

While this is true from a pure math point of view, once again personal finance always involves a healthy dose of human behavior considerations as well. If you read the column regularly, you know I believe an investor’s tolerance for risk will often change with market conditions. I also believe the time to adjust portfolio risk is during positive points in the market cycle. Once market volatility rises and negative market cycles set in, the response I favor is to just hunker down and endure.

This is easier said than done, but the important lesson to be learned is that if losses cause more stress than expected during down cycles, then this emotional response must be acknowledged and risk levels must be adjusted the next time portfolio values rise and confidence is regained.

I am thankful that financial planning now has its own month in America. Perhaps the important thing about building financial independence over time is understanding that the process is a journey, not a destination.

There’s always more to learn about the subject and ourselves along the way, and no subject is both more human and more mathematical at the same time.

Opinions are solely the writer's and are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing involves risk, including loss of principal. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial.  Contact Marc at marc.ruiz@oakpartners.com Securities offered through LPL Financial, member FINRA/SIPC.