Equity
Financial term in the General category
Definition
The value of ownership in an asset after debts are subtracted. In real estate, it's the property value minus what you owe. In stocks, it represents ownership shares in a company.
Related Terms
Home Equity
The portion of your home that you truly own, calculated as the property's market value minus what you owe on your mortgage. Builds over time through mortgage payments and property appreciation.
Stock
A share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
Net Worth
The total value of your assets minus your liabilities. A key measure of financial health that should ideally increase over time as you build wealth.
Frequently Asked Questions
What is Equity?
The value of ownership in an asset after debts are subtracted. In real estate, it's the property value minus what you owe. In stocks, it represents ownership shares in a company.
Why is Equity important in personal finance?
Equity is an important general concept that helps individuals make better financial decisions. Understanding Equity can improve your financial planning and help you achieve your money goals.
How does Equity relate to Home Equity?
Equity and Home Equity are related financial concepts. The portion of your home that you truly own, calculated as the property's market value minus what you owe on your mortgage. Builds over time through mortgage payments and property appreciation.
More General Terms
View all General termsGet Personalized Advice
Ask Warren AI how Equity applies to your specific financial situation.
Try Warren Free