Both of which do nothing for that persons daily life. Can’t unlock home equity because they need a place to live. Not unlocking 401k value because… we’ll they are frugal and that is a bad idea.
While they are definitely well off, perhaps upper middle class, it is a vastly different lifestyle than 20mm net worth.
Indeed, imagine saying: “there's not that much difference between $50,000 in assets and $1,000,000 in assets.” Of course more money earns more money, but it's still important not to underestimate the importance of a factor of 20. One can try it the other way: “there's not much difference between $20,000,000 and $400,000,000.” Except that many of us here probably can't really grasp either, I think we wouldn't believe that.
Those lifestyles are no where near being the same.
*based on a conservative 3% withdrawal, but the point stands irrespective of the withdrawal percentage.
You could scrutinize loans based on assets to close the gap.
A person with $20M assets at 8% earns $1.6M per year. A 20x difference in assets is essentially an entire generation of wealth accumulation..