Equity represents ownership or value in an asset. It can manifest in various contexts, encompassing both financial and moral aspects. Here are some examples illustrating the multifaceted nature of equity:
Financial Equity Examples:
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Homeownership: As the reference states, "We've been slowly paying off our mortgage and building up equity in our house." This demonstrates how paying down a mortgage increases your ownership stake (equity) in your home. The more you pay, the more equity you build. This equity can be accessed through refinancing or selling the property.
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Private Equity Investments: The reference mentions, "There are just a handful of billionaires in Asia who made their fortune from private equity." Private equity involves investing in companies not publicly traded on stock exchanges. Investors purchase equity shares, owning a portion of the company. Profits are realized through the sale of these shares or through dividends.
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Stock Ownership: Owning shares of a publicly traded company represents equity. The value of your equity fluctuates with the company's stock price.
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Business Ownership: Starting a business gives you full equity in that business. The equity's value is linked to the business's profitability and assets.
Moral and Social Equity Examples:
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Fairness and Justice: The reference highlights, "In making these decisions we should be governed by the principle of equity." This refers to equity in a moral or social context, emphasizing fairness and justice in resource distribution or decision-making. For instance, ensuring equal access to education or healthcare exemplifies equity in action.
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Equal Opportunity: Providing equal opportunities to all individuals, regardless of background, promotes equity. This could involve affirmative action programs or removing systemic barriers that hinder certain groups.
These examples showcase the breadth of the term "equity." While financial equity focuses on ownership and value in assets, the broader concept of equity encompasses fairness and justice in social and economic systems.
