When we run the application variables and Objects both are stored in seprate memory one is called Heap and another is called Stack. class variable, local variable and method offset is stored in stack and Object is stored at heap.
Ex-
MyClass myclassreference = new MyClass(
String name, int age);
This statement create an object of type MyClass and stored it at heap but the reference variable "myclassreference" is stored in stack and it consists meomry address of the created object. suppose if the memory address is 1001 of the object then the value of myclassreference will be 1001. Thats why the reference variable points to the object memory location.
I think it will help you....