No, your understanding isn't correct. The vast majority of "average" people cannot stop working and cannot survive off their income.

The cost of somewhere to live has gone up so much that even people like me, with an absurd amount of cash in the bank account, can't leave work and try to survive because it would be wiped out by 3 years of rent.

How many average laborers in a country with fully socialized medicine can afford a decade of rent off their current savings? How many could do that even if they magically found a way to cut other expenses in half?

I could eliminate my electric bill, my internet bill, my grocery bill, all my bills other than rent, and the money saved per year would pay for an extra month or so of rent. That is the entire problem. No amount of frugality can paper over this systemic problem.

When my mother raised us in poverty, it was necessary to play games with utilities, which ones you cancelled which months, to make ends meet. This was actually worth doing, because skipping the $20 cable payment one month was about 1/10th of the monthly house payment. A year of skipping cable could pay for a month of rent. If I skipped a year of much more expensive cable internet, I could not use that to pay even a single month of rent. There's a lot of dumb money being spent, with my personal pet peeve being cell phones, but if a person "doesn't need" the newest iPhone and went without to be frugal, often they haven't even gotten back a single month's rent. What the fuck is the point of living in serious poverty just so that you can extend your rent runway by less than 10%?

The only people in current society who can actually afford to survive off the wealth they have accumulated are called capital owners and you will find that indeed, they are rarely doing things they don't "want" to do, and no, the time they spend really shouldn't be considered "work" since they sign their own paychecks most of the time.

Running a business is work, but if I get to decide what my business does, I don't get to then insist that my side hobbies that I've started doing under the name of my business are also work.