Lesson One · Equity
A share is a slice of a whole company, not an IOU.
Buying a makes you a partial owner of the business. You get a proportional claim on whatever is left after creditors, employees, and tax authorities are paid — the company's . You usually get a vote at annual meetings. You get upside if the business grows. And you get none of it if the business fails — shareholders are last in line when things go bad. That last-in-line position is exactly why equities have historically paid more than bonds. You're being paid to bear the risk everyone else offloaded onto you.
“A share isn't a promise. It's a claim on whatever's left after every promise has been kept.”