Two people can have identical net worth on paper and be in completely different real-world positions, depending on one factor that a single net worth number doesn't capture: how quickly they can actually get their hands on their money.
Here's the contrast. Person A has ₹20 lakh net worth, almost entirely tied up in property and long-term investments with exit penalties or processes that take weeks. Person B has the same ₹20 lakh, but a meaningful chunk sits in a savings account or liquid fund, accessible within a day. If both face a sudden ₹2 lakh emergency, Person B handles it calmly within hours; Person A may need to sell something at an inconvenient time, break a fixed deposit early and lose interest, or take on new debt just to bridge the gap until something can be liquidated.
Why liquidity deserves its own attention, separate from net worth: a large net worth feels secure in the abstract, but if none of it is quickly reachable, that security doesn't actually show up when you need it most. Liquidity — how fast and how easily you can convert an asset into usable cash without a significant loss — is its own dimension of financial health, distinct from the total size of your wealth.
The practical takeaway: alongside tracking your net worth, keep a portion of your wealth genuinely liquid — readily accessible without penalty or delay. It's the difference between being wealthy on paper and actually feeling secure when something unexpected happens.