What is Equity?

Equity is the amount of money you would receive if you liquidated all of your assets. Equity is the amount of ownership you possess as it pertains to assets. 

Equity is measured in percentages. Equity is calculated by subtracting your liabilities from your assets.

Assets – Liabilities = Equity

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Liabilities = Assets – Equity

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Assets = Liabilities + Equity

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Equity is also known net worth. There are two main types of equity.

1. Shareholder – the amount of equity you own in a business
2. Real Estate – the amount of own on a real estate property.

Of course there are many other things you can have or own equity in, but the to major types are listed above. Some other things you may have equity in are listed below.

• Automobiles
• Equipment
• Electronics
• Furniture 
• Appliances

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