I built a securities portfolio based on index funds prior to beginning my REI activities. Now I still contribute to get my company match in a 401k but I am now investing after tax savings exclusively into RE. I wish I had started earlier and more aggressively in RE and foregone some of my stock asset accumulation.
I don't think RE works that well with just a couple of rentals. There is too much variance and risk. Each property is like picking an individual stock and your variance will be high. But when you have a larger portfolio of RE properties, it's more like an index fund - it doesn't kill you to have one property vacant or trashed - and you can acquire the portfolio using leverage. In addition to cash flow, you will accumulate equity courtesy of your tenants. I simplistically think of my rental properties as piggy banks with a constant trickle of money from the tenant into the piggy bank. Then when the piggy starts to get somewhat full, you can empty it out (cash out refinance) and let it start accumulating again. If you have plenty of rentals at different levels of equity accumulation scheduling the use of that equity is another alternative to paying off rentals and owning free and clear - and of course there is nothing wrong with that either.