Equity represents ownership in a company or asset. It gives shareholders a claim on part of the company’s assets and earnings. Whether you're investing in stocks, owning a home, or running a business, equity plays a vital role in building long-term wealth.
In the financial world, equity typically refers to common stock or shares that investors buy and sell on public markets. It's also used to measure the value of an asset after subtracting liabilities — for example, home equity is the value of a homeowner’s interest in their property.