Bill Gates is “The Richest Man in the World.” Again.
In its latest list, Forbes pegs his net worth at $76 billion. Net worth is just another way of saying wealth, where wealth = assets – debt.
Debt is pretty simple – it’s what you owe. Assets, meanwhile, are what you own.
Assets can be a bit confusing, though, because sometimes debt can be an asset.
Confused? Here’s a short video explaining what assets are.
So what are Bill Gates’ assets?
The vast majority of Gates’ money is invested. Through his Cascade Investment Fund, he’s put money into both private and public companies – about 17 percent is sunk into Microsoft.
It’s hard to value those private companies, because they’re not publicly traded, so you can’t say what Gates’ holdings are worth until he actually sells them, or they go public. The public companies, like Microsoft, can be valued, and that’s where Gates has seen the biggest gains. And there’s some cash, of course. Gates gets $250,000 each year for serving as a director on Microsoft’s board. And there are the dividends that he earns on many of the public company shares that he owns. Maybe he uses that money for household expenses, or maybe he plows it back into his investment fund. Or maybe he just leaves it in the bank, and takes advantage of one of the easiest money makers in the world: compounding.