Part 5/9:
Equity is the third critical concept. Naval emphasizes that ownership is paramount in the pursuit of wealth. If you do not own equity in a business, your capacity for financial freedom is significantly limited. He explains that while salaried positions can offer decent income, they lack the potential for passive income that equity ownership can yield.
Owning a piece of a business allows for the generation of income even in your absence—on vacation or during retirement. Successful professionals often build private practices or invest in businesses where they hold equity, ultimately unlocking pathways to financial freedom that traditional employment cannot offer.