Are you financially better off not owning a home? That’s the question CBC News reporter Sophia Harris debated in her latest article. Sophia profiled Kristy Shen and Bryce Leung, who retired in their early 30’s and travel the world. (Kudos to this young couple for achieving financial freedom and living out their dreams.)

How did they accomplish this feat? By rejecting the homeownership “cult.” Instead of buying a “pricey” home and being a slave to their mortgage for the next 25 years to life, the couple rents and invests their money. They argue that it makes no sense to own a million-dollar home in expensive real estate markets like Toronto and Vancouver. How do they make ends meet? By earning $30,000 to $40,000 a year in passive income from dividend–paying stocks in their $500,000 investment portfolio.

It shouldn’t come as a shock I’m in favour of homeownership. (I did buy a home in Toronto at age 27 and pay it off in three years.) But what might come as a surprise is that I agree with some of the points the 30-something couple made (I just don’t agree with framing homeownership in such a negative light). No, I don’t think it’s a good idea to be “house rich, cash poor” by buying a home at the top of your housing budget and working at a job that you hate until you retire or drop dead (whichever comes first). “Buying too much home” is one of the biggest financial mistakes you can make. Not only is the added stress of carrying a massive mortgage not good for your health, it’s probably not good for your marriage either.

Burn Your Mortgage

The good news is that homeownership doesn’t have to be this way. You don’t have to live your life in misery. You can still own a home, go on nice vacations and enjoy your Starbucks and iPhone. The key is to buy a home can afford. This is a point I hammer home in my upcoming book, Burn Your Mortgage. Just because your bank says you can spend $800,000 on a home, doesn’t mean you should. Not every home in Toronto or Vancouver costs over $1 million. There are still plenty of affordable options out there like a modest condo or a house in the suburbs. You might be able to find a home with everything you’re looking for for only $700,000.

By taking on a smaller mortgage, not only could it mean saving tens of thousands of dollars in interest over the life of your mortgage, by being laser-focused on paying down your mortage, you could reach financial freedom years soon. By working hard, earning side hustle and putting every spare penny toward your mortgage, you could have it paid off in under 10 years. Wouldn’t that be nice? A paid off home gives you choices: you can quit the rat race, travel around the world, start your own business or take a job you truly enjoy. It’s completely up to you!

Renting vs. Buying

The young couple argues that the returns they will achieve from their investment portfolio will likely be better than owning a home and the various expenses that come along with it like home insurance, property tax and utilities. However, one important factor that they’re ignoring is the power of leverage.

When you buy a home, the bank lets you borrow up to 95 percent of its value. The bank doesn’t let you borrow this much money for stocks. Why not? Because real estate is seen as a safe, long-term investment. (It’s also because of collateral. If you lose all your money in the stock market, the bank has nothing, but if you default on your mortgage, the bank can sell your home to recover some or all of its money.)

Here’s an example that shows the power of leverage: Let’s say you bought a home a decade ago for $250,000, with only 10 percent down ($25,000). You later sold it for $400,000, making $125,000 in profit (for simplicity’s sake, we’ll ignore associated costs such as mortgage interest, property taxes and closing costs). Even though your home only went up in value by 60 percent, that’s a 500 percent return on your initial investment (down payment) of $25,000. Try finding that kind of return in the stock market!

Another advantage homeownership offers is forced savings. Whether you’re surfing the web on your laptop or using apps on your smartphone, the temptation to spend is everywhere. It’s getting harder and harder to say no to impulse purchases. Sure, you might come out ahead by renting and investing, but that requires a lot of financial discipline. When you’re a renter and stop investing, there are no immediate consequences, but if you’re a homeower and you stop paying your mortgage, not only will you ruin your credit history, you could come home one day to find a foreclosure notice posted on your front door. I don’t know about you, but that seems like a pretty good incentive to keep paying your mortgage!

Rental Income: The Dividend-Paying Investment Portfolio of Homeowners

“If you have a house, you either sell off the entire house, or you get nothing,” Shen said. “You can’t take off a shingle and use it to pay your debt.”

While that may be true, similar to a dividend-paying investment portfolio, you can make money off of your home by renting it out. By living in the basement and renting up the upstairs, I was able to cover the mortgage and housing-related expenses and turn a small profit. I realize living in the basement isn’t practical for everyone, but if you live in a condo perhaps you could get a roomate or if you live in a house you could rent out the basement to tenants. By earning extra income from “home sweet home,” you can rest easier at night knowing you have a safety net in case if you want to take a break from the workforce and travel or go back to school.

Whether you choose to rent and invest or buy a home, there’s no easy way around it. Building an investment portfolio of $500,000 or saving up a down payment for a home takes dedication and discipline (I would argue saving up a down payment is easier), but by being smart about homeownership and burning your mortgage as quickly as possible, you could be well on your way to achieving financial freedom while you’re still young enough to enjoy it.

Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available now on Amazon and at Chapters, Indigo and major bookstores, and as an Audiobook on Amazon, Audible and iTunes.