Building Employee Equity

Originally Published June 2000

Richard S. Schifreen

Home ownership: it's the American dream. To many people, owning and building equity in a home means security. And just as Americans grow equity in their homes to create a more stable financial future, companies and employees should focus on growing professional equity to gain more stability in today's changing-at-the-speed-of-light marketplace.

Equity is a fabulous phenomenon. Someone purchases a home, paying just 5 to 20% of the home's value as the down payment. Over time, equity—the value of the home—usually increases as the owner continues to make payments toward the loan and improves the property, and as the home appreciates. Of course, some properties do lose equity if a second loan is secured, maintenance is ignored, or the neighborhood declines. But, for the most part, as time passes and owners invest time and funds into their purchase, they receive a valuable return on their investment.