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Here’s a way renting beats owning a home by miles

Mark Blinch/The Globe and Mail

For wealth-building, owning a home and renting are pretty much a wash. If you rent and invest the money saved over owning, you can build comparable wealth to the owner. Where renting beats ownership clean is in providing financial flexibility.

Consider the story of personal finance blogger John Robertson. Because of an illness, his household had to go down to one income. An emergency fund helped sustain them, and so did helpful family members. But the fact that his family rents was also a big factor. They rent in Toronto, by the way.

Rent and mortgage costs may not be dramatically different. But the renter saves on property taxes, insurance and, most dramatically, upkeep and maintenance. You can invest this renter's dividend, or you spend it strategically to get yourself through an illness in the family, to work fewer hours to spend with family, to travel more or to take time off to upgrade your skills.

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"In exchange for a little less security of tenancy, the renters gain a massive increase in resiliency and flexibility," Mr. Robertson writes. There's more to this rent vs. own debate than money.

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Find out if you qualify for a mortgage based on your income and expenses.

Ask Rob

The question: "I'm in my early 30s and live in northern B.C. I have about $150,000 in mutual funds and $50,000 in cash savings. Since I have no immediate plans for this money, I am wondering what would be a strong course of action to see my savings grow over time."

The answer: "First off, a cash emergency fund is a great thing to have. Hang onto at least some of your savings for that purpose. As for the remainder, what's your timeline? If you can let your money sit for five to 10 years or more, then mutual funds, exchange traded funds or individual stocks and bonds can be used to build a diversified investment portfolio with a significant tilt toward stocks rather than bonds. Unsure how to proceed? Maybe a robo-adviser is for you."

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.

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