I was looking over the net worth of a specific baseball player and it says his net worth is between $6 million-$15 million. But in the same article it says he earned $51 million playing four seasons in the majors. If he earned $51 million how is his net worth $15 million max?
In: 5
Gross income = earned wages before deductions ($51,000,000 contract)
Deductions can be: federal taxes, state taxes, SS and Medicare, health insurance, 401k, mandatory withholding (child support and alimony)
Net income = actual take home pay
Same theory applies to net worth…
Gross Worth = total lifetime earned wages before deductions and debts
Net Worth = total lifetime earned wages minus deductions AND minus outstanding debts (mortgage, car loans, credit card debt, etc)
The same way any person could earn $50,000 per year (that’s $200,000 over 3 years) but not have $200,000 in their bank account. They spent most of the money instead of saving it.
Costs deducted from earnings. Taxes, purchases, cost of living, his management team gets a percentage.
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