This is the year! Yes, you can make 2012 the year you alter your financial life for a more secure future. Let’s look at some steps you might think of taking with the goal of financial freedom in mind.

Look at your income sources, your expenses and your debts. How do you earn income? If you earn it from one source, is there effectively a ceiling on it, or is there real potential for your income to rise in the next few years? Now look at your core living expenses, the ones you can’t avoid (such as a mortgage payment and car payment). Can any core expenses be reduced? Investing aside, you position yourself to gain ground financially when income rises, debt diminishes and expenses stay (relatively) the same.

Maybe you should pay down your debts. If you’ll be carrying a debt for a while, put it to a test. Weigh the interest rate on that specific debt against your potential income growth rate and your potential investment returns over the term of the debt. If the interest rate on that debt looks like it will outpace your income growth and investment returns, then you should really think about paying that debt down fast, because you can’t afford that interest rate.

Implement or refine an investment strategy. You can’t refrain from investing, even when the bears are out. You’re not going to retire on the relatively small elective deferrals from your paycheck; you’re going retire on the interest that those accumulated assets earn over time, plus the power of compounding. Consistent contributions into your retirement accounts, this year and in years to come, has the potential to enormously help you improve your financial life.

Patience can be your ally when it comes to stock market investments. It is easy to understand that with the recent behavior of the stock market, you may be getting impatient. You may be thinking: “What should I do in 2012? Should I do something different? Should I get out of the market now?”

Keep Your Perspective. The market is going to rise and fall. Short-term stock market fluctuations happen, and they can occur quickly and often without warning.  Your retirement investment plan is designed for the long-term and should be based on your needs and goals, with your specific time horizon in mind. Adjusting a long-term financial plan in response to short-term market downturns can be a costly mistake.

Keep up with the news in 2012, but try to look beyond the moment and keep your long-range goals in mind.

Request professional guidance for the retirement wealth you are growing. An independent fee-based financial advisor will really help to educate you about the principles of wealth building.  If you’d like to discuss your 2012 investment goals with a professional from the Retirement Corporation of America, or if you have any questions about recent market activity, please call me at 513-769-4040, or send an e-mail to me at dan.kiley@rca-online.com I look forward to offering you our professional knowledge and guidance this year – and for years to come.