Most people grow up with parents telling them that the best investment they can make is to buy real estate, and to save their money for a down payment. For Torontonians, trying to scrape together 10% of a half-million dollar home can take a decade or more of hard saving, especially if a university education is in the picture.

With the ridiculous state of housing prices in Toronto, young people might be better off investing in stocks than in property (especially with the stock market in such a sorry state right now), and a Bay Street entrepreneur can’t help but agree.

In this Rob Carrick article in the Globe and Mail, seasoned investor Joe Canavan says people in their 20s and even early 30s should enjoy life in their early years rather than tie themselves down with a mortgage on a house.

The article adds that across Canada, the average price of a house increased 5.8% per year over 30 years, versus the stock market which averaged 9% a year in the same time. (Admittedly, the price of a house in Toronto increased a lot more than 5.8% on average over the last three decades.)

From the article:

“Here’s the Canavan plan: Graduate in your early 20s and find a place to rent in the city where you work. Be close to public transportation so you have the option of not owning a car. With every paycheque, invest what’s left over after you cover necessities in an investment account. ‘If the money is constantly going into your investment account, it’s constantly working for you and you’re less likely to blow it on frivolous things.’

“Target home ownership in your mid- to late-30s, which is what Mr. Canavan himself did. In his younger years, he rented modest apartments in Toronto’s Beaches and Yonge and Eglinton neighborhoods. He was married at 35 and bought a house a couple of years later, when he and his spouse had a child. ‘Because I had invested all the money in equities, we bought our house with cash. I didn’t have a mortgage.'”

Now, Canavan is guilty of saying broadly that we could all presumably buy a house with cash when we’re ready if we invest just right during our early years. In all likelihood, a select few will do that. But the guy has a point.

And finally, a word of warning. The stock market is a fickle, inconsistent thing. There are never guarantees that you’ll make money, and more than a few have lost it all by playing the stock market.

But what we do believe in strongly is the argument for freedom – using your money to enjoy life and hopefully make a return on whatever investments you do make – rather than buckling down early in life to chase a dream that was far more applicable in the 1970s than it is to the Millennial generation of today.