This number is probably the truest measure of a person’s real wealth: What is the largest unexpected financial shock you could sustain without the cost of that to you suddenly becoming ten times the original cost or more? That number isn’t something easy to calculate; it depends on whether you have a family that can help you out, on your income, on whether that shock involves losing your job (and thus your health insurance, if you live in the US), on whether you have access to any other sources of security (including public assistance).
From Yonatan Zunger's "Your 'Financial Shock' Wealth".
https://medium.com/newco/your-financial-shock-wealth-4845e6d...
Other commentators have similar arguments. Economist Emma Rothschild makes the explicit point that Adam Smith's "liberal philosophy" was one of material liberty, that is, of an abundance of material wealth at the individual level, which allows for a freedom of actions without catastrophic consequence.[1] Several recent modern commentators have noted that the chief characteristic of poverty is a lack of choice: if there's only one way to do things right, without consequence, you have no freedom.
Among Zunger's references is the point that very nearly a majority of US households, 47%, cannot sustain an unexpected $400 expense.
https://www.theatlantic.com/magazine/archive/2016/05/my-secr...
Whether or not living paycheck-to-paycheck is necessarily a characteristic of poverty is of course debatable in specific instances. But one cannot look broadly at the population of the US and claim both that market economics succeeds on the basis of individuals making intelligent and rational economic decisions and that many millions of those people, very nearly if not majority of those same people fail to do so.
Something is very rotten in the "free market".
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Notes:
1. I'm trying to track down the Emma Rothschild reference, though I suspect it may be in Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment.