If they'd invested, say, $5m in AMZN when it opened, they'd be a billionaire today.
Nope. Buying something doesn't make it "active". Active means you are involved in managing the business. My example was buying AMZN and literally doing NOTHING with it for 20 years. It's the very definition of passive investing.
> Active investing is what used to just be called investing — buying or selling individual stocks or bonds.
>...
> Passive investments track indexes, which are groups of securities that are alike in some way.
[1]: https://www.bloomberg.com/quicktake/active-vs-passive-invest...
https://www.investopedia.com/terms/p/passiveinvesting.asp
Besides, it doesn't make much sense to call someone an "active" investor who literally did nothing with it for 20 years. He wouldn't have even had to account for it on his taxes, as AMZN hasn't paid any dividends.
With the Vanguard index fund, the IRS is going to come looking for their cut every year.
I agree though, nobody gets massively rich on passive investment. You get massively rich on active schemes (whether that is via entrepreneurship or investing), and then you passively collect when the scale of your wealth grows to the point where the liquidity of passive schemes is more important.