Suze Orman Says Homeownership Is Not the Key to Financial Freedom. Here's Why She's Right

Don't assume that buying a home will lead to financial security.

"You're throwing your money away." "All you're doing is paying your landlord's mortgage." These are the phrases you'll often hear thrown at renters by those who are convinced that homeownership is the true ticket to financial security.

Now in reality, there are certainly some financial benefits to homeownership. Not only can you enjoy certain tax breaks, like the ability to deduct mortgage interest, but the equity you build in your home can be tapped and used as a cash source. In fact, many retirees who own homes find that those properties are their greatest financial asset.

But while there are advantages to owning a home, that's not necessarily the key to financial freedom. And if you're not convinced, you should know that financial guru Suze Orman says the same.

You can do just fine as a renter

When you rent a home, you don't get to build equity in a place of your own. But that doesn't mean you can't reach a financially stable place as a renter.

In fact, Orman has been quoted as saying, "Homeownership is not the lock and key to financial freedom. I know some seriously wealthy people who have never owned a home in their lives."

Renting a home could mean spending less money on housing than if you were to own a place. That's because you won't face the numerous costs homeowners face, like maintenance, property taxes, and repairs (all of which have the potential to climb over time).

In fact, if you're renting and therefore spending less on housing, you can take your extra money and invest it, either in a brokerage account, retirement savings plan, or both. And that way, you can make it grow over time.

Look at the big picture

You'll often hear that renting a home is a waste of money because you don't get anything out of it in the long run. But you get something in the near term -- a roof over your head. And there's nothing wrong with that.

When you buy groceries at the supermarket, you're not making an investment -- you're satisfying the biological need of being nourished. And just as it's okay to spend money on food, it's also okay to spend money on rent, even if you don't get anything in return. But if you also make a point to save and invest some of your money, you can reach a place of financial freedom where your housing costs aren't a burden and you're able to live a comfortable lifestyle.

All told, Orman says, "The true financial dream isn't about owning a home; it's about being secure with whatever you're doing with the money that you have." So think about what your goals are. If owning a home is important to you, then by all means, save up a down payment and go out and buy one.

But don't stress out over renting a home or push yourself financially to buy one because you've been told that's the ticket to financial security. It's more than possible to land in a financially stable place as a lifelong renter.