Q: I know people who have a set financial plan and those who don't, preferring to figure this out as they go along. Who's right?

A: Your friends with specific plans are on the right road – provided that these plans are realistic and well thought-out.  

Not only do many people not have a financial plan, many of them don't understand what such a plan should involve. One way to deal with this is to engage a qualified financial planner. Whether you take this route or go it alone, a financial plan should be the answer to issues raised by key questions about your future, including:

• When will you have enough assets to retire, and how long will these assets last? Will you outlive your retirement resources?
• What will be your income streams during retirement? What's the best strategy to timing the beginning of your Social Security benefits and what will your total monthly figure be? Do you have any pensions? What will be your withdrawals from your investment portfolio?
• What will your standard of living be during retirement? How much will you need for this, and do these figures account for likely inflation? What kind of spending items would be included in a retirement budget? Does this budget include costs for health care and for long-term care if you or your spouse needs it? Do you have long-term care insurance now to take care of this, or are you planning to self-insure?

I have one friend who's always overly optimistic about the stock market and another who's always predicting a crash. Whom should I believe?

Neither. Some people—perma‐bulls—are always predicting that the stock market will go up, and others—perma‐bears—are always predicting that it will go down. Both groups are misguided because, as history shows, the market randomly and unpredictably goes up and down. This historical reality doesn't stop stubborn bulls and bears from fixating on events in ways that are consistent with their views.

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If you’ve ever received an invitation from a financial or investment company attempting to entice you with the lure of a free meal, you were probably skeptical.

Your intuition couldn't be better. Your skepticism is encouraged by the Financial Industry Regulatory Authority, which recently issued an investor alert titled "'Free Lunch' Investment Seminars – Avoiding the Heartburn of a Hard Sell." The reason you're on the free-lunch mailing list is that the company determined that you have the financial resources to buy their products and services. It's all quite enticing: a free meal with all the trimmings at no obligation, they say. Many large financial service companies routinely hold these events at expensive steakhouses.