To buy or not to buy?
Michael Katchen, the 29-year-old co-founder and CEO of millennial-focused investing company Wealthsimple, says that while many young people work hard and save to buy a home, it can be a really bad way to spend your money.
"I see a lot of peers, young people, that say, 'I have got to buy a house because I have got to get into the real estate market because it is a great investment.' And then they take all of their money and they put it in a house, and then they put all of their income and they put it towards their mortgage," Katchen tells CNBC Make It.
"And suddenly they have this house that they can barely afford."
Between the down payment and mortgage payments, Katchen says new homeowners end up having to limit the amount that they go out with friends or visit their families because they are cramped by making payments toward their house.
"For me, that is a terrible investment, because you are buying this thing but sacrificing your life to do it," he says.
Katchen, who is building his second business and lives in Toronto, says he could afford to buy a house, but he chooses to rent.
"I could afford a home, and I might buy a home. But I am buying it because, for me, it would be a home, not because I think it is a great investment — and to me that is the distinction," he says.
After a couple years working at the consulting company McKinsey, Katchen joined his two friends in 2011 to grow their Y Combinator-backed start-up 1000memories, which turned smart phones into photo scanners. Three years later, they sold the company to Ancestry.com. In September 2014, he and the 1000memories co-founders, Brett Huneycutt and Rudy Adler, started Wealthsimple, which aims to streamline investing for young people.
Wealthsimple now has 30,000 customers and over $1 billion in assets under management, according to the company. Katchen, who fell in love with investing when he was just 12 years old, wants WealthSimple to be Vanguard for millennials, with $1 trillion in assets under management in 15 years.
There are better investments than real estate, Katchen says: "I would pick a diversified portfolio over a house as an investment."
Katchen is not alone in suggesting that young people think twice about home ownership. "Why is the goal in America always to buy a house?" asks Ramit Sethi, personal finance guru and author of The New York Times best-selling book "I Will Teach You To Be Rich," in a blog post.
"Why are more and more people choosing to rent (including me)? Oh, I don't know … maybe it's the fact that in large cities, it makes no financial sense to buy. Or that as an asset class, real estate dramatically under-performs the stock market."
There are still, however, plenty of experts who push homeownership as a way to build wealth.
Self-made millionaire and author of "The Automatic Millionaire" David Bach says thatnot working to buy a home is "the single biggest mistake millennials are making." Buying a home is an "an escalator to wealth," he says.
"If millennials don't buy a home, their chances of actually having any wealth in this country are little to none," says Bach.
"I am a true believer that you save every penny and you buy your first house. And that is still the fastest path to wealth in this country," Conlon says.
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