> entrepreneurs in particular can often see a better return by investing in themselves and in ventures in their own community, where things are not so passive.

You don't understand the power of diversification in portfolios. Yes, there are plenty of individual ventures that will return more than an index fund. But individual ventures are fundamentally volatile. They are volatile because human beings are not machines. People burn brightly and then burn out. People push hard and then fall sick. Cultures and institutions and trust are painstakingly built, and then wiped away in an instant by ideologues.

As an individual investor, you have your labor and your savings. You cannot productively diversify your labor, but you can diversify your savings.