Investing term

What is Equity?

Ownership in something. For a company, it's what's left after all debts are paid — split across all shareholders.

Equity means ownership. For a company it's what remains for shareholders after all debts are subtracted from assets, divided among everyone who owns shares. When you buy a stock you're buying equity — a real claim on the business's profits and assets, ranking behind lenders but with unlimited upside if the company thrives.

For example

If a company's assets are worth $10M and it owes $6M, the $4M of equity belongs to shareholders — your share of it rises and falls with the business.

Equity is taught hands-on in Stage 4 — Stocks, Bonds, Cash & Alternatives.

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Related terms

AlternativesInvestments outside the core stocks/bonds/cash mix — REITs, commodities, gold, crypto.BondA loan from you to an issuer (government or company), repaid with interest on a known schedule.Capital gainThe profit from selling an investment for more than you paid.CommodityA raw physical good like gold, oil, wheat, or copper — priced by the ounce, barrel, or bushel.
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