> Liquidity is a useful concept to think about when evaluating your risk levels. Having 500k in stocks is different than 500k in your primary residence. Same net worth but if you need to tap into 500k of stock, you can do that tomorrow. Liquidating your primary residence takes a few weeks (or months) and you’re then homeless.

This is well said and the main reason why when calculating if someone is an accredited investor they always exclude the value/equity of a person's primary residence.

Someone who is renting but has a large pile of cash is in a better position to repay than someone who has their equity in their home as selling equites vs selling their primary home have far different stresses on the person, all other things being equal.

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hammock 10 hours ago | parent [-]

Liquidity can be broken down further into volume profile and net proceeds.

1) There is a good likelihood that a house and a stock portfolio can both be sold tomorrow, no problem. But you may have to offload the house at “fire sale” prices , vastly lower than the price it would bear if you had it on offer for 30+ days.

2) T-bills and stocks can both be sold tomorrow, but if your stocks have cap gains then the net proceeds after tax are going to be much lower from the sale of stocks than the t-bills.

These are some of the ways “paper gains” and “market price” fundamentally lie to you (irrespective of bubbles etc), that are seldom broken down in too much depth in personal financial discussions.

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Another dimension that is missing is financial freedom. The author says:

> These wealth levels have existed throughout human history, even though the unit of currency changes.

↑-1 Wealth: Destitute (less than $3) At the bottom-most level, a person can’t even scrape together a few bucks for some food. Societal services aren’t accessible unless they are completely free. Finding a toilet and shower may be difficult. They have no possessions; their shoes and coat are probably decrepit and dirty.

Hard disagree here. An indentured servant in the 17th century, with a negative net worth, might have a very decent standard of living. Nice shoes, coat, bountiful table, etc. But they are not free to leave the land and move somewhere else. They are not free to pick up a different occupation.

	▲	danaris 7 hours ago \| parent [-]
		It sounds like you may simply be misinterpreting or assigning different values to wealth levels than the author? There were unquestionably many people in the 17th century who fit the description there. Just because you can come up with an example of someone who might plausibly fit the basic "has negative personal net worth" criterion who doesn't fit the rest of it doesn't refute that.