Free Exchange joins the debate:
Focus on the small business analogy. Like a home, a small business is an illiquid, undiversified, highly leveraged investment, the performance of which is likely to be highly correlated with the owner's personal economic welfare. And we encourage small business investments, do we not? With good reason! But the risk inherent in entrepreneurialism is widely understood.
Everyone knows the factoid that half of all businesses fail within the first four years (this statistic is not necessarily accurate, but people understand the risk involved). Starting a small businesseven just buying an investment property to operate as a landlordis not part of the standard advice given to people looking to save for retirement. No one is looking to make three-fourths of the American population small business owners
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