But when you pay rent, "you're not throwing money away," Sethi tells CNBC Make It.
When looking at homes as an investment, renters commonly overlook the "phantom costs" of owning a property beyond the monthly mortgage payment.
"People say they don't want to throw money away on rent," Sethi says.
"I've made more money renting than I would have owning," he says, referring to investments made with money that could have been spent on a down payment and phantom costs for units similar to the ones he rented.
Considering that home values have increased by 85% since 2010, many Americans have built wealth by owning a home.
Persons:
Ramit Sethi, Rich, Sethi, I've, that's
Organizations:
CNBC
Locations:
Los Angeles and New York