You can train anywhere you want. The major benefit of home training is convenience. If the time saving and convenience benefits of training at home help you stick to your training program better, then by all means, work out at home. However, the more advanced you become, the more you'll benefit from joining a health club.
As a gym owner and manager, I admit I'm showing my bias by saying everyone should eventually join a gym, but in a well-equipped club, the exercise possibilities are endless, the atmosphere is motivational and people are there to help you.
I started working out in my parent's garage at the age of 14 with nothing more than a barbell set, some dumbbells, an adjustable Joe Weider Bench, with a leg curl/leg extension attachment, a squat rack and an Arnold Schwarzenegger book to guide me. I worked out in that garage for the first six months, then I joined a gym and have been training in a well-equipped gym ever since.
If you decide to train at home, basic free weights are all you need to get started. You can perform hundreds, even thousands of exercises with nothing more than dumbbells. If you also get yourself a bench and barbell set and you clear out a little corner in your favorite room, you're ready to roll! If you want to get really fancy about your home gym set-up, the next pieces of equipment you want are (1) a cable-pulley machine with a low and high pulley, and (2) an adjustable squat rack or power rack.
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The use of dumbbells gives you a much more comprehensive strengthening effect because the workout engages your stabilizer muscles, in addition to the muscle you may be pin-pointing. Without all of the belts and artificial stabilizers of a machine, you also engage your core muscles, which are your body's natural stabilizers.