Q: I'm currently renting a house and I'm considering buying. Which makes more sense financially? 

A: This is a complex question, and the answer depends on a lot of factors. But even if you could identify all of the factors and put numbers on each, this wouldn't necessarily answer the question of which is the better choice for you.

For most people, the best reasons to own a home have little or nothing to do with whether it's a good financial investment. Everyone desires a comfortable place to live and raise their family. Which house you choose, and how you pay for it, is not just an investment. First, it's a lifestyle choice.

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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